Weighted Average Life
From Open Risk Manual
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Definition
The Weighted Average Life (WAL) in a securitisation context refers to the expected average amount of time that will elapse from the Issue Data to the date of repayment of the outstanding amounts of the securitisation"'"s notes
Details
The Weighted Average Life of securitisation notes is influenced by, among other things by
- the actual rate of repayment (Constant Prepayment Rate, CPR) of the Transferred Receivables
- this rate of repayment may itself be influenced by economic, tax, legal, social and other factors
- if prevailing interest rates fall below the interest rates on the Transferred Receivables, then the Transferred Receivables are likely to be subject to higher prepayment rates than if prevailing interest rates remain at or above the interest rates on the Transferred Receivables
- if the structure has a Revolving Period the Seller may not be able to originate sufficient Eligible Receivable to replace all pre-paid Transferred Receivables having been prepaid
Variations
None
Issues and Challenges
None
See Also
None
Disclaimer
- This information is provided as is without any representation of correctness, completeness or suitability for any purpose whatsoever. Refer to actual securitisation prospectuses for the definitive terms applicable in each case
- Definitions, detailed descriptions and other content may change at any time as further examples or relevant aspects are introduced
