A pass-through certificates is an instrument that evidences the ownership of two or more equipment trust certificates. In other words, equipment trust certificates may be bundled into a pass-through structure as a means of diversifying the asset pool and/or increasing the size of the offering. The principal and interest payments on the equipment trust certificates are “passed through” to certificate holders.A Pass Through Certificate is an instrument which signifies transfer of interest in receivables in favor of the holder of the Pass Through Certificate. The investor in a Pass Through transaction acquire the receivables subject to all their fluctuation, prepayments etc. the material risks and rewards in the asset portfolio, such as the risk of interest rate variations, risk of prepayment etc., transferred to the investor.
What is ‘Pass-Through Certificate’
Fixed-income securities that represent an undivided interest in a pool of federally insured mortgages put together by the Government National Mortgage Association (Ginnie Mae).
Explaining ‘Pass-Through Certificate’
Mortgage-backed certificates are the most common type of pass-through, where homeowners’ payments pass from the original bank through a government agency or investment bank to investors.
Pass Through Certificate FAQ
What is pass through transaction?
What is a pass through mortgage?
What is pass through rate?
What is Pass Through Trust?
What is pass through certificate India?
What is a collateral trust certificate?
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