/

ApplyPriorityWaterfall2

[this page | pdf]

Returns an array, , that corresponds to the fraction of particular priority bands (‘tranches’) () owned by different investors () 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:

 

(a)  , the SurplusDistributionFractions, to the different priorities in the order implied by ValuesToWaterfall, if AllocateSurplusByPriorityLevel is true

(b)  , the SurplusDistributionFractions, to the different investor categories in the order implied by ValuesToWaterfall, if AllocateSurplusByPriorityLevel is false

 

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.

 

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.

 

---

NAVIGATION LINKS
Contents | Prev | Next

---

-          Interactively run function

-          Interactive instructions

-          Example calculation

-          Output type / Parameter details

-          Illustrative spreadsheet

-          Other Cash-Flow Projection functions

-          Computation units used

Note: If you use any Nematrian web service either programmatically or interactively then you will be deemed to have agreed to the Nematrian website License Agreement

---