subordinated classes

subordinated classes

Those classes of collateralized mortgage backed securities that have the lowest priority to receive payments from the underlying mortgage loans, and thus the highest risk and the highest rate of return.

References in periodicals archive ?
48%; and the issue of three subordinated classes of notes of total USD75m.
Further, Cabela's said its wholly-owned subsidiary World's Foremost Bank bought each of the subordinated classes of notes that has an expected life of about five years with a legal maturity of about eight years and this securitisation transaction will fund the growth of World's Foremost Bank's credit card portfolio.
If market forces or over-leveraging wipe out most of the value of a transaction's subordinated classes, the special servicer owning those classes may lose its incentive to maximize resolution of mortgages in default.