Tut Week 12.docx

Multisector cdos are a subsegment of abs cdos but in

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sequential paying, non‐agency residential mortgage‐backed securities. Multisector CDOs are a subsegment of ABS CDOs but, in addition to these nonagency sequential mortgage‐backed securities, the collateral contains other forms of securities like commercial mortgage‐backed securities (CMBS) or even notes issued by CLOs. Recall the basic principle of securitization, in which equity and debt of various credit qualities are sold to finance a diversified portfolio of (primarily) consumer assets such as mortgages or credit cards. The securities created in the process are called asset‐ backed securities or ABSs. 11.3: Each country has its own bankruptcy law, however the laws function in more or less the same way. In the United States there are two main chapters of US federal bankruptcy law for commercial purposes. Discuss the similarities and differences between Chapter 7 and 11. Chapter 11 is a bankruptcy law for reorganization that allows the obligor to work out and restructure its obligations for the purposes of a fresh start such that it emerges from the bankruptcy proceedings as a viable entity.
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Chapter 7 is a bankruptcy law for liquidation in which the obligor is assumed to be unlikely to survive, even with a restructuring; thus it undergoes liquidation.
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