What is a true up provision in a securitization creating rate reduction bonds?
What will be an ideal response?
Rate reduction bonds are backed by a special charge (tariff) included in the utility bills of utility customers in. The charge, called the competitive transition charge (or CTC), is effectively a legislated asset. The CTC is initially calculated based on projections of utility usage and the ability to collect revenues. However, actual collection experience may differ from initial projections. Because of this, there is a "true-up" mechanism in these securitizations. This mechanism permits the utility to recompute the CTC on a periodic basis over the term of the securitization based on actual collection experience. The advantage of the true-up mechanism to the bond classes is that it provides cash flow stability as well as a form of credit enhancement.
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A. the United Kingdom B. Luxembourg C. Turkey D. Switzerland
The Governmental Accounting Standards Board
a. was incorporated into the Financial Accounting Standards Board when the FASB was created. b. addresses financial reporting issues of U.S. government treaties and treasury rulings. c. addresses the financial reporting issues related to state and local governments. d. addresses the governmental reporting activities of the SEC.
When Karen is frustrated, she perseveres until she resolves the issue causing her frustration. Karen has a ______.
a. growth mindset b. fixed mindset c. fearful mindset d. right-brained mindset
What is the primary purpose of a distribution system?
a. to determine the specific needs and wants of the customer b. to provide an adequate framework for making a company’s product or service available to customers c. to help with pricing goods and services d. to create and maintain high sales volumes