ApplyPriorityWaterfall
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Function Description
Returns an array, 
, that corresponds to
the fraction of particular priority bands (‘tranches’) that will be satisfied
if the debt (liability) values, 
, to ‘waterfall’
through the priority ladder are in ValuesToWaterfall, the overall asset
value available, 
, is AssetValue
(and if there is a surplus of AssetValue over the sum of the entries in ValuesToWaterfall
then this is allocated pro-rata in line with 
, the SurplusDistributionFractions,
to the different priorities in the order implied by ValuesToWaterfall).
Earlier entries are given higher priority in this cascading,
i.e. all debts/liability values applicable to the earlier entries are honoured
in full (to the extent that this is possible) before any later (i.e. lower
priority) debts/liability values are honoured at all.
Thus (ignoring error trapping for division by zero):
The function does not trap for negative values of or .
Application of this type of computation can be important for
financial structures where liabilities are tranched or otherwise honoured
differently in the event of insufficient assets being present to honour all the
liabilities in full.
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Output type / Parameter details
Output type: Double()
| Parameter Name | Variable Type | Description |
| ValuesToWaterfall | Double() | Values of debts/liabilities to waterfall through priority ladder |
| AssetValue | Double | Total assets available |
| SurplusDistributionFractions | Double() | Fractions that define how any surplus is distributed |
Links to:
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Interactively run function
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Interactive instructions
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Example calculation
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Output type / Parameter details
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Illustrative spreadsheet
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Other Cash-Flow Projection functions
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Computation units used
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