> 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/pro-rata-waterfall.md).

# Pro-rata Waterfall

### **Pro-Rata Structure**

In a **Pro-Rata** structure, both tranches share repayments more evenly. Senior still has priority on interest, but principal is allocated proportionally based on each tranche’s outstanding amount.

#### **How It Works**

When the pool receives a repayment:

**Interest Distribution**

1. Senior overdue interest
2. Senior current interest
3. Junior overdue interest
4. Junior current interest
5. Remaining interest flows to EIS

**Principal Distribution**

* As long as the Senior tranche has outstanding principal, principal is shared **pro-rata** between Senior and Junior based on their remaining balances.
* Once Senior is fully repaid, all principal flows to Junior.

#### **In Simple Terms**

* Interest still prioritises Senior first.
* Principal is shared proportionally until the Senior tranche is paid off.
* Junior receives principal earlier compared to Sequential, reducing their risk relative to that structure.