Planned Amortization Class (PAC) Tranche Financial Glossary

What is it? A REMIC security created to receive selected cash flows from a pool of underlying mortgages securing the REMIC. PAC tranches use a structure similar to a sinking fund to establish a fixed principal payment schedule. Created together with a companion or support tranche. PAC tranches are intended to have low call and low extension risk. Sometimes called controlled amortization bonds.

Finance Term Definition Added By: Brian

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