Lower Tier Regular Interests Clause Samples
The "Lower Tier Regular Interests" clause defines a specific class of interests or securities within a structured finance transaction, typically representing claims on cash flows that are subordinate to higher-tier or senior interests. In practice, these lower-tier interests receive payments only after obligations to senior tranches have been met, and they may be subject to greater risk of loss if the underlying assets underperform. This clause is essential for allocating risk and return among different classes of investors, ensuring that losses are absorbed in a predetermined order and providing clarity on the payment hierarchy within the structure.
Lower Tier Regular Interests. As to any Two Tier Series or Three Tier Series, the interests issued hereunder and specified in the related Lower Tier Schedule other than the RL Class Certificate.
Lower Tier Regular Interests. (a) For each Trust created under this Trust Agreement, the Trustee will make one REMIC election with respect to the assets held in the Trust, with such REMIC to be designated as a Lower Tier I-REMIC.
(b) Except as otherwise provided in the applicable Issue Supplement:
(i) Each Lower Tier I-REMIC will designate an I-REMIC Interest as a Regular Interest in respect of each Mortgage Loan held in the MBS Trusts identified on Schedule 1 to the related Issue Supplement (each such Regular Interest, a “Lower Tier I- REMIC Mirror Interest”).
(ii) None of the I-REMIC Interests issued by the Lower Tier I-REMIC will benefit from any guaranty.
(iii) Each Lower Tier I-REMIC will designate an I-REMIC Interest (an “LT-R Interest”) as the sole Residual Interest in the Lower Tier I-REMIC.
(iv) Solely for purposes of satisfying Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, the “latest possible maturity date” of each I-REMIC Interest in each Lower Tier I-REMIC will be the Final I-REMIC Distribution Date of such Lower Tier I-REMIC.