First-loss: Difference between revisions
Jump to navigation
Jump to search
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
Line 1: | Line 1: | ||
{{a|g|[[File:Vegas housing.jpg|450px|thumb|center|Des res Nevada style, yesterday.]] | {{a|g|[[File:Vegas housing.jpg|450px|thumb|center|Des res Nevada style, yesterday.]] | ||
}}''Not to be confused with a [[first-order derivative]].''Of potential claims against a given pool of assets, the “[[first-loss]]” is first one up against the wall when the revolution comes. This is to do with priority, preference and capital structure. | }}''Not to be confused with a [[first-order derivative]].'' | ||
Of potential claims against a given pool of assets, the “[[first-loss]]” is first one up against the wall when the revolution comes. This is to do with priority, preference and capital structure. | |||
The first one for the early shower will be he whose claim is most ''[[subordinated]]''. That will be the common shareholder, if there is one, and if not (in, say, a CDO or a structured note of some sort) it will be the one bringing up the rear in the [[security waterfall]]. That will usually be the Noteholder or, if there are several [[tranche]]s of Notes, the most [[junior]], most deeply [[subordinated]], ones. | The first one for the early shower will be he whose claim is most ''[[subordinated]]''. That will be the common shareholder, if there is one, and if not (in, say, a CDO or a structured note of some sort) it will be the one bringing up the rear in the [[security waterfall]]. That will usually be the Noteholder or, if there are several [[tranche]]s of Notes, the most [[junior]], most deeply [[subordinated]], ones. |