Series 50: Sequential Pay CMO

Taken from our Series 50 - MSRB Municipal Advisor Representative Qualification Exam

Definition of the term Sequential Pay CMO...

a CMO structure also known as a plain vanilla offering in which each tranche receives regular interest payments, but principal payments are made only to the first (most senior) tranche until it is completely retired, after which principal payments are applied to the next most senior tranche until it is fully retired, and so on until the last tranche is retired.

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