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Sir i quote this paragraph from a technical article titled “Securitisation and tranching”
“A bank has made a number of mortgage loans to customers with a current total value of $350 million. The mortgages have an average term to maturity of ten years. The net income from the loans is 7% per year. The bank will use 85% of the mortgage pool as collateral for a securitisation with the following structure:”
In this i wanted to know if the amount received by the bank from SPV is the full $350m? or it is $297.5m? against a collateral of $297.5m.
your answer would be much appreciated sir!
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