Overcollateralization

Overcollateralization

The practice or process of placing an asset as collateral on a loan where the value of the asset exceeds the value of the loan. For example, a person could pledge a farm (worth $10 million) on a loan for $5 million. Usually, however, the value of the asset only exceeds the value of the loan by 10-20%. Overcollateralization reduces the risk for the lender and improves the borrower's creditworthiness. It is used most commonly when a bond issuer wishes to improve its credit rating.
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These defaulted securities have resulted in the violation of all the overcollateralization tests because defaults are required to be carried at 30% of their par values for the purpose of calculating the overcollateralization ratios.
84% from 8% at close and is provided by a combination of subordination, overcollateralization, and a variable funding certificate.
The ratings on the notes are based on credit enhancement in the form of overcollateralization, the subordination of the Class B Certificates, and a reserve account supporting Class A Notes; full turbo structure which uses excess spread to fast pay the notes, creating further overcollateralization; CFC's considerable experience in servicing the receivables; and the strong legal structure of the transaction.
08 million outstanding in aggregate) are being downgraded due to monthly losses which have generally exceeded excess spread and caused deterioration in the overcollateralization (OC) amount.
The ratings on the notes are based on credit enhancement in the form of overcollateralization, the subordination of the Class B Certificates, and a reserve account supporting Class A Notes, full turbo structure that uses excess spread to fast pay the notes, creating further overcollateralization; CFC's considerable experience in servicing the receivables; and the strong legal structure of the transaction.
Additionally, the 2006-B securitization incorporates a yield supplement overcollateralization (YSOC) amount that compensates for receivables in the pool with interest rates below 8.
The ratings on the Notes are based on the following: credit enhancement in the form of overcollateralization, the subordination of the noninterest-bearing Certificates, and a reserve account supporting the Class A Notes, full turbo structure which uses excess spread to fast pay the Notes, creating further overcollateralization, Chrysler's considerable experience in servicing the receivables, and the strong legal structure.
DCR's ratings are based on credit enhancement in the form of overcollateralization and a reserve account supporting Class A Notes, full turbo structure which uses excess spread to fast-pay the notes creating further overcollateralization, Chrysler's considerable experience in servicing the receivables and the strong legal structure of the transaction.
The trust, seasoned 11 months, has a growing overcollateralization (OC) structure which relies on the remaining excess spread after losses to build the OC to the target amount.
The ratings on the notes are based upon funds in the reserve account, the subordination provided by the asset backed certificates, and the availability of excess spread to create overcollateralization (O/C).
Fitch's ratings on the notes are based upon their respective levels of subordination; the specified credit enhancement amount, which consists of funds in the reserve account, overcollateralization; and the yield supplement overcollateralization amount (YSOA).
The rating on the asset backed certificates is based on the reserve account and the overcollateralization created through the application of excess spread.