A planned amortization class whereby a REMIC security is created in order to receive cash flows from a pool of underlying mortgages that secure the REMIC. These tranches have a structure that is similar to that of a sinking fund in order to set up a fixed schedule of payments.
Related information about PAC tranche:
- Planned Amortization Class (PAC) Tranche Definition | Investopedia
A class of tranche in a planned amortization class (PAC) bond that receives a primary payment schedule. As long as the actual prepayment rate is between a ...
- The Various Types of CMOs
With a PAC tranche, the yield, average life, and lockout periods estimated at the time of investment are more likely to remain stable over the life of the security.
- Collateralized mortgage obligation - Wikipedia, the free encyclopedia
The PAC tranche will receive whichever rate is lower, so it will change ... For example a $100mm PAC tranche off 6% collateral with a 6% coupon ('6 off 6' or ...
- What is PAC tranche? definition and meaning
Definition of PAC tranche: A planned amortization class whereby a REMIC security is created in order to receive cash flows from a pool of underlying mortgages ...
- Planned Amortization Class (PAC) Tranche: Definition from Answers ...
Planned Amortization Class (PAC) Tranche A class of tranche in a planned amortization class (PAC) bond that receives a primary payment schedule.
- Collateralized mortgage obligations (CMOs) - Wells Fargo Advisors
A PAC tranche uses something like a sinking fund in a fixed principal-payment ... away from the PAC tranche and toward a “companion” or “support” tranche.
- ANSWERS TO END OF CHAPTER QUESTION
with a WAM of 340 months or (ii) a PAC tranche of a Freddie Mac CMO issue ... has been mitigated by the creation of a planned amortization class (PAC) tranche ...
- REMIC Structures - Ginnie Mae: For Investors
A useful analytical tool for assessing the stability of a PAC tranche is the "effective band", which measures the range of constant prepayment speeds that will ...