PT  - JOURNAL ARTICLE
AU  - Andrew Chasen
TI  - The Impact of Structure on the Value of CMO Bonds
AID  - 10.3905/JSF.2009.15.3.026
DP  - 2009 Oct 31
TA  - The Journal of Structured Finance
PG  - 26--31
VI  - 15
IP  - 3
4099  - https://pm-research.com/content/15/3/26.short
4100  - https://pm-research.com/content/15/3/26.full
AB  - Despite the recent negative attention, mortgage securitization provides a vehicle to take assets without much investor appeal and create bonds whose risk and return profiles are customized to those of various investors. This is accomplished by “structuring” the cash flows of the assets into various “tranches,” each with the appropriate level of prepayment or credit risk for the prospective buyer. The extreme credit impairment of the current mortgage market has changed the dynamic of these structural relationships. Understanding the various structures and their nuances will enable a savvy investor to seek value in today’s upside down market.TOPICS: CLOs, CDOs, and other structured credit, MBS and residential mortgage loans, CMBS and commercial mortgage loans