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Early Amortization

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Early Amortization
Early repayment of an asset-backed security, usually occurring when something goes wrong. Most commonly, if there are more than a certain number of defaults on the assets (such as mortgages) underlying the security, early amortization occurs. It is intended to reduce the risk to the investor and therefore to entice buyers.


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Standard & Poor's ratings address the full and timely payment of interest and the ultimate full repayment of principal by the final legal maturity date, which is scheduled to be six years following the occurrence of an early amortization trigger event.
15 times (x) required to trigger an Early Amortization Event, which would require all excess cash after paying debt service and certain transaction expenses be applied toward prepayment of principal on the notes.
However, as disclosed in the NextCard Credit Card Master Note Trust offering memorandum, the FDIC may have the power to prevent the commencement of an early amortization period.
 
 
 
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