In Example 2, if the $10 loss had not been written down
before the sale to B, it would have been deferred under Sec.
9% credit enhancement, will be entirely written down
in about 39 months.
Since that time, class B-1 was fully written down
to $0 (August 2004) and losses are now resulting in write-downs to class M-2.
In the series 1997-1 transaction, overcollateralization (OC) has been fully depleted, and the high level of losses incurred has resulted in the adjusted certificate principal balance of class B-2 being written down
Non-rated classes B3, B4 and B5 have already been fully written down
due to losses.
This is because goodwill must be written down
, but an implied increase in the tangible net book value of the 49% interest cannot be recognized.
This deal is also structured such that bonds that were written down
due to losses can be written back up.
PRMI), a wholly owned subsidiary of Principal Life Insurance, is expected to be written down
by $70 million to $110 million by year-end 2003.
Separately, as part of its fiscal year-end review process, MVC announced that the valuation committee of the Fund's Board of Directors has written down
the fair value of certain Fund holdings.
The class E notes have been completely written down
, and do not benefit from the additional credit enhancement.
Currently, those accounts are often written down
as bad debt expense.
All of the above referenced deals are structured such that there is the ability in future periods for the bonds that were written down
due to losses to be written back up.
However, the financial structures provide for interest to be paid on both written down
principal as well as carryover interest amounts.