> For the complete documentation index, see [llms.txt](https://docs.qiro.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.qiro.fi/products/qiro-marketplace/securitisation/cashflow-waterfall.md). # Cashflow Waterfall In a securitised lending pool, investors are divided into different **tranches**, each with its own level of risk and return. When the borrower repays interest and principal, these cashflows must be distributed to the tranches in a predefined order.\ This predefined order is called the **cashflow waterfall**. A waterfall determines **who gets paid first**, **how much they receive**, and **when junior investors start receiving their share**. Because each tranche carries a different level of protection and priority, the design of the waterfall directly affects: * Investor risk * Expected yield * Speed of principal repayment * Protection against defaults Qiro supports two common waterfall structures for distributing repayments: * **Sequential Waterfall** — cashflows flow top-down, prioritising Senior investors before paying Junior investors. * **Pro-Rata Waterfall** — cashflows are shared proportionally between tranches, while still preserving seniority on overdue amounts and interest. These waterfall patterns form the core of how tranching works and define the economic relationship between Senior and Junior investors in a pool. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.qiro.fi/products/qiro-marketplace/securitisation/cashflow-waterfall.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.