Sequential Waterfall

1. Sequential Structure

In a Sequential (or “waterfall”) structure, Senior investors are paid first. Junior investors receive repayments only after all Senior obligations are fully cleared.

How It Works

When the pool receives a repayment:

Interest Distribution

1. Outstanding Senior overdue interest is paid first.

2. Then current Senior interest is paid.

3. Any remaining interest goes to the Excess Interest Spread (EIS).

4. Only after the Senior tranche is fully repaid (no outstanding principal) does interest start flowing to Junior:

   • Junior overdue interest

   • Junior current interest

Principal Distribution

1. All principal first repays:

   • Senior overdue principal

   • Senior current principal

2. After the Senior tranche is fully repaid, principal flows to:

   • Junior overdue principal

   • Junior current principal

In Simple Terms

• Senior investors get repaid first—both interest and principal.

• Junior begins receiving principal only after Senior is completely paid down.

• This structure provides maximum protection to Senior investors.