... notes with fixed-rate notes or vice versa. Exacerbated interest-rate mismatches between the assets and liabilities could occur, leading to potential debt-servicing issues in certain interest rate environments. Refinance individual tranches at a higher interest rate so long as the weighted average of all tranches refinanced is lower. A higher rate of interest on class A note reduces available proceeds to pay notes subordinate to such class. Less available proceeds to cure particular coverage tests. For example, an increase in the second priority note interest rate and corresponding decrease for a fourth-priority note interest rate may result in less excess spread available to cure a failure of the second-priority coverage test. Refinanced tranche notional amounts may exceed the original notional of the tranche replaced through refinancing. Often included to permit refinancing expenses in the par amount of tranches refinanced. Credit enhancement...
