Z-Bond
Contents
Demystifying Z-Bonds: Understanding the Last Tranche of Mortgage-Backed Securities
Unravel the intricacies of Z-bonds, also known as accrual bonds, and explore their role as the final tranche of collateralized mortgage obligations (CMOs). From understanding the fundamentals to mitigating risks, this comprehensive guide provides insights into the world of Z-bonds and their implications for investors.
Unpacking Z-Bond Essentials
Delve into the fundamentals of Z-bonds, exploring their position as the last bond class to mature in a CMO structure. Learn how Z-bonds accrue interest over time and the unique payment structure that distinguishes them from other tranches.
Assessing Z-Bond Risks and Rewards
Navigate the risks associated with investing in Z-bonds, categorized as speculative investments due to their position in the CMO hierarchy. Understand the potential pitfalls of default scenarios and the impact on Z-bond holders compared to other tranches.