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  • January 10, 2023
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Component Interest Only

A type of CMBS (commercial mortgage-backed security) that is formed by combining a weighted average coupon interest only (WAC IO) with notional interest only (notional IO). The WAC interest only is stripped from the collateral and the notional interest only is stripped from the bond classes. Changes in the collateral WAC do not impact the notional interest only as the WAC interest only absorbs changes once occurred.


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