First-loss: Difference between revisions

First-loss (view source)

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 {{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.