Pac bond

PAC bonds offer a fixed principal redemption schedule that will be met so long as prepayments on the underlying mortgage collateral remain within a specific PSA range, which is called a prepayment protection band.

Pac Bond
Financial & Investment Dictionary:
Pac Bond
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With PAC bond cmo classes, the period before the PAC sinking fund becomes effective. With multifamily loans, the period of time during which prepayment is prohibited.
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PAC Bond
acronym for planned amortization class bond, PAC is a tranche class offered by some Collaterized Mortgage Obligations (CMOs) which is unlike other CMO classes in that (1) it has a sinking fund schedule that is observed as long as the ...

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.
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Lock-out
With PAC bond CMO classes, the period before the PAC sinking fund becomes effective. With multifamily loans, the period of time during which prepayment is prohibited.

They differ from PAC bonds whose amortization is guaranteed as long as prepayments on the underlying mortgages do not exceed certain limits. A TAC's schedule is met at only one prepayment rate.

Lock-out
Definition: [crh] With PAC bond CMO classes, the period before the PAC sinking fund becomes effective. With Definition: +loans"multifamily loans, the period of time during which prepayment is prohibited.

See also: Prepayment, Sinking Fund, Banks, Values, Prepayments