luda002

as regards your question - those are projections based on current conditions.

Prepayments are always iffy - there is a very high probability that prepayment cash flows may not pan out as scheduled. So these are really projections, of best case scenario.

How they cover it in the event the prepayments do not happen - is entirely not in scope... I do think they are assured that there will be extension on the CMO tranches - which means they get interest and principal for a longer time.

CP