Business and Personal Finance Dictionary

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• PLANNED AMORTIZATION CLASS (PAC) TRANCHE
  
  A REMIC security created to receive selected cash flows from a pool of underlying mortgages securing the REMIC. PAC tranches use a structure similar to a sinking fund to establish a fixed principal payment schedule. Created together with a companion or support tranche. PAC tranches are intended to have low call and low extension risk. Sometimes called controlled amortization bonds.
  
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