What is ‘A-Note’

The highest tranche of an asset backed security or other structured financial product. An A-note is senior to other notes, such as B-notes in bankruptcy or other credit proceedings, and is paid back first with funds from the underlying assets. They can be labeled AAA, AA, or A, depending on the credit quality of the underlying asset. Can also be referred to as a class a note.

Explaining ‘A-Note’

Lower tranches of notes are referred to as subordinate notes. While an A-note does offer more credit protection than other notes, investors in this tranche must still pay attention to the credit worthiness of investments in the subordinate classes. If the risk levels of those investments increase, the chances of default and repayment risk rise.

Further Reading

  • Using financial prices to test exchange rate models: A note – www.jstor.org [PDF]
  • Financial development and economic growth in Mainland China: a note on testing demand-following or supply-leading hypothesis – www.tandfonline.com [PDF]
  • A note on the interaction between corporate social responsibility and financial performance – www.sciencedirect.com [PDF]
  • Institutional contributions to the leading finance journals, 1975 through 1986: A note – www.jstor.org [PDF]
  • Small and medium size enterprise financing: A note on some of the empirical implications of a pecking order – onlinelibrary.wiley.com [PDF]
  • Electricity economics: Essays and case studies – www.osti.gov [PDF]
  • A note on finance, liquidity, saving, and investment – www.tandfonline.com [PDF]
  • Bank profitability and GDP growth in China: a note – www.tandfonline.com [PDF]
  • A note on the location choice of multinational banks: The case of Japanese financial institutions – www.sciencedirect.com [PDF]
  • Insider holdings and perceptions of information asymmetry: A note – www.jstor.org [PDF]