Planned Amortization Class CMO

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Planned Amortization Class CMO
– CMO bond type that directs contributions towards a sinking fund. The redirection is carried out in line with predetermined schedules. Here principal payments are first directed to sinking fund on a priority basis before other CMO classes can lay claim. Excess cash flow is diverted to other bond categories.
– CMO category that comes with the smallest risk in terms of pre payment. This CMO has the most consistent cash flow patterns.

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  2. Sinking Fund Requirement
  3. Single-Payment Bond
  4. Lock-Out
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