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Commercial mortgages often contain lockout provisions (typically a period of 1–5 years [2] where there can be no prepayment of the loan) which they can be subject to defeasance, yield maintenance and prepayment penalties to protect bondholders. European CMBS issues typically have less prepayment protection.
Defeasance (or defeazance) (French: défaire, to undo), in law, is an instrument which defeats the force or operation of some other deed or estate; as distinguished from condition, that which in the same deed is called a condition is a defeasance in another deed. [1] The term is used in several contexts in finance, including: [2]
The statement explained that a bond defeasance is a process that sets aside and invests the remaining bond dollars in escrow to ensure that the principal and interest payments on the bonds are ...
Current Yield – But now consider how yield changes if the price of that same bond falls. If the bond mentioned above is resold for $800 it results in a current yield of 6.25%.
Key takeaways. Acceleration clauses, a common feature in mortgage contracts, require that you pay off your entire loan balance immediately in a single lump sum.
In finance, a floating charge is a security interest over a fund of changing assets of a company or other legal person.Unlike a fixed charge, which is created over ascertained and definite property, a floating charge is created over property of an ambulatory and shifting nature, such as receivables and stock.
A mortgage loan has two parts: The promissory note.This is the financing instrument that acts as evidence of the debt. It’s a written promise or agreement to repay the debt in installments with ...
Deferred maintenance is the practice of postponing maintenance activities such as repairs on both real property (i.e. infrastructure) and personal property (i.e. machinery) in order to save costs, meet budget funding levels, or realign available budget monies. The failure to perform needed repairs could lead to asset deterioration and ...