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credit enhancement

   Also found in: Wikipedia 0.02 sec.
Credit enhancement
The purchase of the financial guarantee of a large insurance company to raise funds. In the context of project financing, the issuance of a guarantee or additional collateral to reinforce the credit strength of a project financing. Also, the reduction of counterparty risk on a swap transaction through such measures as bilateral netting.

credit enhancement
An addition to a bond issue that improves the issue's safety of principal and interest. For example, the purchase of insurance guaranteeing payments on a bond issue is credit enhancement.

credit enhancement

A method of reducing the risk of extending credit to a borrower. It can include requiring collateral,a stand-by letter of credit,a comaker,a guarantor,or any other means.



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Credit enhancement for the 'AAA' rated class A certificates reflects the 37% credit enhancement provided by the M-1 through M-9 and B certificates, monthly excess interest, and initial over collateralization (OC) of 8.
Credit enhancement for the 'AAA' rated class A certificates reflects the 37% credit enhancement provided by the M-1 through M-9 and B certificates, monthly excess interest, and initial over collateralization (OC) of 8.
Credit enhancement for the 'AAA' rated class A certificates reflects the 6.
 
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