Economics
Excess spread
status: draft
The difference between collateral yield and the cost of notes, fees, servicing, and expected losses.
What to watch
Excess spread is usually the first line of credit protection and the originator residual engine. Model how quickly it disappears under stress.
Referenced in 59 topics
Accessing insurance capital for originators playbooks Accounts and cash management mechanics Administration agreement documentation Advance rates and the borrowing base mechanics Advanced waterfall mechanics mechanics Agency RMBS asset-classes Amortization and repayment mechanics Auto loans and leases asset-classes BNPL receivables asset-classes Bridge / fix-and-flip asset-classes Cash flow modeling accounting-valuation Cash operations and waterfall execution operations-lifecycle Cell tower and data center ABS (digital infrastructure) asset-classes Choosing the right structure playbooks Collateralized loan obligations (CLOs) structures CRE CLOs asset-classes Credit analysis accounting-valuation Credit card receivables asset-classes Credit funds and private capital capital-sources Credit-linked notes / synthetic securitizations structures Deal structures asset-classes Forward flow agreements structures GAAP vs IFRS accounting comparison accounting-valuation Hedging and interest rate mechanics mechanics Legal opinions and third-party reports documentation Marketplace lending and fintech-originated asset-classes NAIC filing and designation deep dive legal Navigating the deal process playbooks Performance metrics accounting-valuation Performance triggers mechanics Portfolio monitoring for ABF funds operations-lifecycle Pricing and relative value accounting-valuation Private placement memorandum (PPM) documentation Protecting your position in distress playbooks Recognizing distress early playbooks Risk factors documentation Sale and contribution agreement documentation Sample term sheet (annotated) appendix Sample waterfall appendix Selecting a fund administrator playbooks Single-family rental (SFR) asset-classes Structural tests (OC/IC) mechanics Structuring deals for investor appeal playbooks Term securitization (ABS/MBS) structures Term sheet anatomy documentation The economics of ABF for originators (worked examples) playbooks The waterfall mechanics Timeshare receivables asset-classes Top capital provider mistakes playbooks Trigger negotiation strategies mechanics Trigger remediation strategies mechanics Triggers, tests, and performance events mechanics True sale and perfection legal Valuation methodologies accounting-valuation Warehouse facilities structures What capital providers care about playbooks When things go wrong playbooks Wind-down lifecycle-events Workouts, restructuring, and enforcement lifecycle-events