Sequential Pay

A principal waterfall in which all available principal is applied to the most senior outstanding tranche until fully repaid before any proceeds flow to junior tranches. Standard during amortisation and post-trigger periods.

Cash Flow Waterfall

The contractual priority of payment sequence in a securitisation. Standard structure: senior expenses → senior interest → OC test → junior interest → reserve replenishment → equity distributions.

Turbo Redemption

Accelerated repayment of senior notes triggered by OC or IC test failure, funded by diverting excess spread. Conditional turbo: applies only while the test is failing. Unconditional turbo: always redirects; common in European CLOs.