Welcome to AbsBox Discussions! #4

from Fabozzi is always a good start overall.
Triggers is a credit enhance mechanism which varies deal by deal, thus no book covers in detail, I would recommend reading prospectus of deal or offering circular / rating reports .

Thanks for the reply. I have a good chunk of the Fabozzi books as well as several other Fixed Income books. None of them really mentions anything about Triggers. I guess going to the prospectus is always an option.

this is a abstraction of Trigger ( opinionated based )
https://absbox-doc.readthedocs.io/en/latest/modeling.html#trigger

its about when bad things happed, then the deal cashflow distribution would be changed to favor of senior bond holder.

bad things could be:

• deteriorated pool performance ( pool default rate/ delinquency rate/ loss rate breach a threshold or breach a time series based threshold
• a servicer go bankruptcy
• a bond rating went down
• or issuer has a lower rating
• a bond is outstanding too long without being paid off
• a deal last too long without clean up call or paid off totally