Diaz claims that he can provide an opinion as to which asset backed securitization (ABS) to invest in since it is very similar to his credit analysis of the companies. He lists the following factors as being relevant in his analysis:
Factor 1: The credit quality of the collateral including concentration of loans and credit enhancements.
Factor 2: The quality of the company servicing the receivables including its history, experience and underwriting standards.
Factor 3: Cash flow stress and payment structure. This analysis focuses on the company selling the receivables and its ability to support the waterfall distribution.
16. Diaz is least likely correct with regard to which of the factors he applies to the analysis of ABS?A. Factor 1.
B. Factor 2.
C. Factor 3.
答案：
C is correct because the collateral generates cash flow from interest and principal payments that will be used to pay fees, then principal and interest to bondholders. The collateral is placed into a trust that is legally separate and distinct from the issuing company. There is not a reliance on the originator’s ability to service the waterfall.
