Sentences with phrase «equity tranche»

The inherent leverage / risk of their CLO residual equity tranche portfolio has somewhat limited my position.

The residual equity tranche receives all remaining cashflows, once all other claims have been satisfied.

Livermore Investments (LIV: LN) hasn't been a core holding for a long time now — I kept a rump position as a substitute (CLO residual equity tranche) investment in light of my continued under - weight of Tetragon Financial Group (TFG: NA).

The liability side is tranched, so you have an equity tranche, BBB, A, AA, and a junior AAA layers, then say two more AAA layers and the infamous super senior tranche (there could be more tranches than this, but you get the general idea).

In addition, Tetragon usually acquires a majority stakes in its equity tranche investments, which will enhance their rights & negotiating power if things start turning sour.

Their liabilities are tranched (ranging from AAA down to BBB notes, a mezzanine tranche, and finally a residual equity tranche), with a waterfall structure for principal & interest payments.

-- The inverse is also true — that is, all loan default losses are first absorbed by the residual equity tranche, then the mezzanine, the BBB notes, and ultimately by the AAA notes (ideally in v rare circumstances).

In many securitizations, that equity tranche is small, because the underlying assets are high quality.

The smaller the equity tranche, the greater percentage reward for success, and the greater possibility of a total wipeout if things go wrong.

This will bolster our liquidity and finance the equity tranche of our new purchases.

For CLOs, that 5 % stake is typically much larger than an equity tranche which usually amounts to less than 10 % of the notional value.