Mechanics
Waterfall
status: draft
The priority of payments that determines how collections are distributed among fees, interest, principal, reserves, and residual holders.
What to watch
Read the pre-trigger and post-trigger waterfalls. Your economics can change completely after a performance breach.
Referenced in 131 topics
ABF fund operations team structure operations-lifecycle Accounts and cash management mechanics Administration agreement documentation Advance rates and the borrowing base mechanics Advanced waterfall mechanics mechanics Aircraft leases asset-classes Amendments and waivers lifecycle-events Amortization and repayment mechanics Auto loans and leases asset-classes Bank regulatory considerations legal BNPL receivables asset-classes Borrowing base mechanics mechanics Breaking into ABF playbooks Bridge / fix-and-flip asset-classes Broadly syndicated loan CLOs asset-classes Build vs buy decisions operations-lifecycle Calculation agents and data agents counterparties Career paths in ABF playbooks Careers at banks playbooks Careers at credit funds playbooks Careers at originators playbooks Careers at service providers playbooks Cash flow modeling accounting-valuation Cash operations and waterfall execution operations-lifecycle CECL and accounting considerations accounting-valuation CMBS (conduit, SASB, large loan) asset-classes Collateral analysis accounting-valuation Collateralized loan obligations (CLOs) structures Common negotiation mistakes playbooks Conduit and ABCP programs structures Container leases asset-classes Covenants mechanics 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 timeline matrix appendix Document coordination documentation Documentation negotiation playbooks Economic terms negotiation playbooks Equipment leases and loans asset-classes EU/UK securitization regulations legal Evaluating a credit fund's ABF strategy playbooks Family offices as ABF investors capital-sources Financial covenants mechanics Finding capital providers market-landscape Finding service providers market-landscape Fund accounting and administration for ABF operations-lifecycle Fund operations infrastructure for ABF operations-lifecycle Fundraising mistakes to avoid playbooks Healthcare receivables asset-classes Hedging and interest rate mechanics mechanics Home equity and helocs asset-classes How ABF works (5-minute overview) foundations ILS diligence guide asset-classes Infrastructure debt asset-classes Intercreditor dynamics in distress playbooks Investor and SEC reporting operations-lifecycle Investor portals and integration operations-lifecycle Key counterparties for credit funds playbooks Legal counsel counterparties Litigation finance asset-classes Managing multiple facilities playbooks Mark-to-model practices accounting-valuation Market data and public datasets market-landscape Marketplace lending and fintech-originated asset-classes Middle market CLOs asset-classes Multi-party negotiation dynamics playbooks Music royalties and content IP asset-classes NAIC filing and designation deep dive legal Offering and disclosure documents documentation Ongoing portfolio management operations-lifecycle Other counterparties counterparties Participant directory market-landscape Personal / unsecured consumer loans asset-classes Pool formation and onboarding operations-lifecycle Portfolio financing asset-classes Preparing your data room playbooks Pricing and relative value accounting-valuation Private placement / bespoke structures structures Private placement memorandum (PPM) documentation Rated note feeders structures Rating agencies counterparties Rating agency engagement for funds playbooks Recognizing distress early playbooks Repackaging structures structures Revenue-based financing asset-classes Rule 144A offering circular documentation Sample waterfall appendix SEC-registered prospectus documentation Selecting a fund administrator playbooks Selecting and working with trustees playbooks Servicer responsibilities counterparties Servicer selection asset-classes Servicer selection and oversight playbooks Servicer termination and transition counterparties Servicers and backup servicers counterparties Servicing agreement documentation Servicing fees and economics counterparties Shipping and maritime finance asset-classes Single-case funding asset-classes Single-family rental (SFR) asset-classes Small business loans (including SBA 7(a)) asset-classes SPVs and bankruptcy remoteness legal State tax considerations legal Structural tests (OC/IC) mechanics Structuring deals for investor appeal playbooks Student loans (federal and private) asset-classes Subscription finance / capital call lines structures Tax classifications explained legal Tax considerations for ABF structures legal Term securitization (ABS/MBS) structures Term sheet anatomy documentation The ABF ecosystem (players, roles, and how they interact) foundations The economics of ABF for originators (worked examples) playbooks The waterfall mechanics Top deal process mistakes playbooks Top originator mistakes playbooks Transaction agreements documentation Triggers, tests, and performance events mechanics Trustees counterparties US entity types for ABF legal Valuation methodologies accounting-valuation Warehouse facilities structures What capital providers care about playbooks Whole business securitization asset-classes Whole loan sales structures Wind-down lifecycle-events Working with accountants and auditors playbooks Workouts, restructuring, and enforcement lifecycle-events