This position will suffer the first economic loss if there is an event that leads to the underlying assets to lose their value or if they are forced to foreclose on. The first-loss position typically has a higher risk as well as a higher yield.
First-loss position
This position will suffer the first economic loss if there is an event that leads to the underlying assets to lose their value or if they are forced to foreclose on. The first-loss position typically has a higher risk as well as a higher yield.
