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PAC Bond |
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PAC Bond Stands for Planned Amortization Class bond. A tranche class offered by some CMOs that has a sinking fund schedule and an ability to make principal payments that are not subordinated to other classes. PAC Bond A collateralized mortgage obligation that seeks to protect investors from prepayment risk. PACs do this by setting a schedule of payments; if prepayments of the underlying mortgages exceed a certain rate, the life of the PAC is shortened. If they fall below a certain rate, the life of the tranche is extended. This helps protect investors in case the holders of the underlying mortgages do not pay off their mortgages as expected. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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Unrestricted prepayments are first applied to redeem series 1998S PAC bonds according to a schedule; second to redeem any series 1998 E-2, 1998 Q, non-PAC series 1998 R, and 1998T bonds until these bonds are redeemed in full; and finally, to redeem series 1998R PAC and 1998S PAC bonds. Two possible explanations for the recent deterioration of this relationship are the increased use of CMO PAC bonds to provide stable cash flows over a wide range of prepayment scenarios, and valuation problems with the implied volatility measure itself. |
PAC Bonds |
Pabst Blue Ribbon Pabst, G W Pabst, G. W. Pabst, Georg Wilhelm PABT PABU PABUG pabular Pabulation pabulin Pabulous pabulum pabulum PABV PABVC PABWE PABX PABX PABX PAC PAC PAC PAC PAC PAC Pac a Mac PAC Bond PAC Bond PAC Bond PAC Bond PAC Bonds PAC CHESTPac choi Pac choi PAC II Project Management System Pac Man Pac Man defense Pac Man defense Pac Man Strategy Pac Man Syndrome Pac-10 PAC-2 PAC-3 PAC-A-TACH Pac-Bell Stadium PAC-C PAC-D Pac-Man Pac-Man defence Pac-Man defense Pac-Man defense pac-man strategy pac-man strategy Pac-Man World Pac-Man World 2 PAC-U Pac. PAC3 PAC3T | ||||||||
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