Business, 11.05.2021 17:20 hihowareyou12

In a certain CMBS issue, $500 million of senior securities and $100 million of mezzanine (junior) securities are issued. The coupon on the senior securities is 7% and that on the mezzanine is 9%. The average contractual interest rate in the underlying mortgage pool is 10% and the mortgages in the pool are interest-only. Assuming annual interest payments, the pool is not overcollateralized, and no par value retired or defaulted. Required:
How much residual interest will be available for an IO tranche from these two par-valued tranches at the end of the first year?

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In a certain CMBS issue, $500 million of senior securities and $100 million of mezzanine (junior) se...