BROWSE

Pass-Through Certificate

Definition

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?

It is a cycle of tolerating credit cards (towards. installment of Air Tickets) by the Travel Planner, where. the installment is acknowledged for the Aircraft. This implies that however the ticket deal is finished by the Travel Planner, the installment legitimately goes through to the Aircraft. Nov 15, 2007

What is a pass through mortgage?

Likewise called a passthrough, a security made when at least one home loan holders structure an assortment (pool) of home loans and sells offers or cooperation declarations in the pool. The income from the guarantee pool is "went through" to the security holder as regularly scheduled installments of head, interest, and prepayments.

What is pass through rate?

The pass-through rate is the loan cost on a securitized resource, for example, a home loan sponsored security (MBS), that is paid to financial specialists once the board expenses, adjusting charges, and assurance expenses have been deducted by the backer of the securitized resource. It is regularly alluded to as the net loan cost. Jun 13, 2020

What is Pass Through Trust?

A transparent trust is a vehicle through which people may pass retirement resources from their individual retirement accounts (IRAs), by means of a trust, to their picked recipients. Transparent trusts let IRA proprietors pick who will be the recipients of the record after the proprietor is perished. Jun 27, 2020

What is pass through certificate India?

A pass through certificate (PTC) is an authentication that is given to a speculator against certain sold sponsored protections that lie with the guarantor. ... The endorsement can be contrasted with protections (like bonds and debentures) that might be given by banks and different organizations to speculators. Apr 12, 2009

What is a collateral trust certificate?

An collateral trust bond is a bond that is made sure about by a budgetary resource, for example, stock or different bonds—that is saved and held by a trustee for the holders of the security. ... A security trust bond is likewise called an insurance trust endorsement or guarantee trust note. Oct 6, 2019

Further Reading


Interest rate pass-through, monetary policy rules and macroeconomic stability
www.sciencedirect.com [PDF]
… Journal of International Money and Finance. Volume 29, Issue 2, March 2010, Pages 236-251. Journal of International Money and Finance … Notes: TCD abbreviates Time Certificates of Deposit. λ C is the long-run pass-through obtained from the cointegrating relationship …

Interest rate pass-through during the global financial crisisInterest rate pass-through during the global financial crisis
www.oecd-ilibrary.org [PDF]
… Journal of International Money and Finance. Volume 29, Issue 2, March 2010, Pages 236-251. Journal of International Money and Finance … Notes: TCD abbreviates Time Certificates of Deposit. λ C is the long-run pass-through obtained from the cointegrating relationship …

The process of financial innovationThe process of financial innovation
www.jstor.org [PDF]
… Journal of International Money and Finance. Volume 29, Issue 2, March 2010, Pages 236-251. Journal of International Money and Finance … Notes: TCD abbreviates Time Certificates of Deposit. λ C is the long-run pass-through obtained from the cointegrating relationship …

Interest rate pass-through in Europe and the US: Monetary policy after the financial crisisInterest rate pass-through in Europe and the US: Monetary policy after the financial crisis
www.sciencedirect.com [PDF]
… Journal of International Money and Finance. Volume 29, Issue 2, March 2010, Pages 236-251. Journal of International Money and Finance … Notes: TCD abbreviates Time Certificates of Deposit. λ C is the long-run pass-through obtained from the cointegrating relationship …

On the determinants of yield spreads between mortgage pass-through and Treasury securitiesOn the determinants of yield spreads between mortgage pass-through and Treasury securities
link.springer.com [PDF]
… Journal of International Money and Finance. Volume 29, Issue 2, March 2010, Pages 236-251. Journal of International Money and Finance … Notes: TCD abbreviates Time Certificates of Deposit. λ C is the long-run pass-through obtained from the cointegrating relationship …

Market volatility and retail interest rate pass-throughMarket volatility and retail interest rate pass-through
www.sciencedirect.com [PDF]
… Journal of International Money and Finance. Volume 29, Issue 2, March 2010, Pages 236-251. Journal of International Money and Finance … Notes: TCD abbreviates Time Certificates of Deposit. λ C is the long-run pass-through obtained from the cointegrating relationship …

Interest rate pass-through: The case of JordanInterest rate pass-through: The case of Jordan
www.tandfonline.com [PDF]
… Journal of International Money and Finance. Volume 29, Issue 2, March 2010, Pages 236-251. Journal of International Money and Finance … Notes: TCD abbreviates Time Certificates of Deposit. λ C is the long-run pass-through obtained from the cointegrating relationship …

Exchange rate pass-through in ASEAN countries: an application of the SVAR modelExchange rate pass-through in ASEAN countries: an application of the SVAR model
www.tandfonline.com [PDF]
… Journal of International Money and Finance. Volume 29, Issue 2, March 2010, Pages 236-251. Journal of International Money and Finance … Notes: TCD abbreviates Time Certificates of Deposit. λ C is the long-run pass-through obtained from the cointegrating relationship …

Stabilizing large financial institutions with contingent capital certificatesStabilizing large financial institutions with contingent capital certificates
www.elgaronline.com [PDF]
… Journal of International Money and Finance. Volume 29, Issue 2, March 2010, Pages 236-251. Journal of International Money and Finance … Notes: TCD abbreviates Time Certificates of Deposit. λ C is the long-run pass-through obtained from the cointegrating relationship …



Q&A About Pass-Through Certificate


Are there any risks involved with investing in these securities?

Yes, there are risks involved with investing in these securities because if home prices fall, then fewer people will be able to afford homes and thus default on their loans which could lead to losses for bondholders.

Who gets what in a pass-through transaction?

The investor acquires receivables subject to all their fluctuation, prepayments etc.

What does it mean to bundle equipment trust certificates into a pass-through structure?

It means to diversify the asset pool and/or increase the size of the offering.

What does it mean for principal and interest payments on equipment trust certificates to be passed through?

It means they are transferred to certificate holders.

Are there other ways of saying "passed through"?

Yes, one can say that Ginnie Mae has received money from homeowners and passed it on to investors.

Is there more than one type of pass-through certificates?

Yes, mortgage-backed certificates are the most common type.

What is Ginnie Mae?

Ginnie Mae is a government agency that guarantees mortgages and passes them on to investors.

What does "passed through" mean in this context?

It means Ginnie Mae has received money from homeowners and passed it on to investors.

How do homeowners' payments get passed through to investors?

Homeowners' payments pass from the original bank through a government agency or investment bank to investors.

Is there another way of saying "passed through"?

Yes, one can say that Ginnie Mae has received money from homeowners and passed it on to investors.

What is a pass-through certificate?

A pass-through certificate represents an undivided interest in a pool of federally insured mortgages put together by the Government National Mortgage Association (Ginnie Mae).

What happens when someone defaults on their loan ?

When someone defaults on their loan , it can cause losses for bondholders who invested in this security .

Are all investments guaranteed by Ginnie Mae ?

No, not all investments are guaranteed by Ginnie Mae . Only those backed by FHA or VA loans are guaranteed by this organization.

Who buys these securities?

Investors buy these securities because they offer higher yields than other types of bonds with similar credit quality.

How do you acquire material risks and rewards in an asset portfolio with a pass-through transaction?

You transfer them (material risks and rewards) to investors.

What is another term for "passed through"?

Another term for "passed through" is "transferred".