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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › tranching
Dear Sir,
when we have used our lending in order to secure a collateralised debt obligation.If our customers, to whom we lent the money, default on the interest payments, who stands to suffer? It will be the investors in each of the tranches, right? I.e we received 0 interest on our lending, therefore in return investors in the tranches will suffer all the loss and get nothing as a result?
That is correct 🙂
thankyou!!
You are welcome 🙂