LIBOR: Effect on Yields of the Floating Rate and Inverse Floating Rate Classes
Low levels of LIBOR can reduce the yield of the Floating Rate Classes. High levels of
LIBOR can significantly reduce the yield of the Inverse Floating Rate Classes. In addition,
certain Floating Rate Classes will not benefit from a higher yield at high levels of LIBOR and
certain Inverse Floating Rate Classes may not benefit from particularly low levels of LIBOR
because the rate on such Classes is capped at a maximum rate described under "Terms Sheet
Interest Rates."
Payment Delay: Effect on Yields of the Fixed Rate Classes and Delay Classes
The effective yield on any Fixed Rate or Delay Class (other than any fixed rate MX Class
that is formed from one or more non-delay Classes) will be less than the yield otherwise
produced by its Interest Rate and purchase price because, on each Distribution Date, 30 days'
interest will be payable on (or added to the principal amount of) that Class even though
interest began to accrue approximately 50 days earlier.
Yield Tables
The following tables show the pre-tax yields to maturity on a corporate bond equivalent
basis of specified Classes at various constant percentages of PSA and, in the case of the Floating
Rate and Inverse Floating Rate Classes, at various constant levels of LIBOR.
The Mortgage Loans will not prepay at any constant rate until maturity, and it is unlikely
that LIBOR will remain constant. Moreover, it is likely that the Mortgage Loans will experience
actual prepayment rates that differ from those of the Modeling Assumptions. Therefore, the
actual pre-tax yield of any Class may differ from those shown in the applicable table
below for that Class even if the Class is purchased at the assumed price shown.
The yields were calculated by
1.
determining the monthly discount rates that, when applied to the applicable assumed
streams of cash flows to be paid on the applicable Class, would cause the discounted
present value of the assumed streams of cash flows to equal the assumed purchase price
of that Class plus accrued interest (in the case of interest-bearing Classes), and
2.
converting the monthly rates to corporate bond equivalent rates.
These calculations do not take into account variations that may occur in the interest rates at
which investors may be able to reinvest funds received by them as distributions on their
Securities and consequently do not purport to reflect the return on any investment in any Class
when those reinvestment rates are considered.
The information set forth in the following tables was prepared on the basis of the Modeling
Assumptions and the assumptions that (1) the Interest Rate applicable to each Floating Rate
and Inverse Floating Rate Class for each Accrual Period following the first Accrual Period will
be based on the indicated level of LIBOR and (2) the purchase price of each Class (expressed
as a percentage of its original Class Principal Balance or Class Notional Balance) plus accrued
interest (in the case of the interest-bearing Classes) is as indicated in the related table. The
assumed purchase price is not necessarily that at which actual sales will occur.
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