Excess spread decrease

As the spread account traps excess spread over a period of deteriorating collateral performance, a driving factor in the effectiveness of the spread account is the rate at which the excess spread decreases. If the collateral performance deteriorates slowly, the spread trapping mechanism will most likely be able to trap the maximum amount of spread allowed. However, if there is a rapid deterioration in the collateral performance, the spread trapping mechanism may not be able to trap the maximum allowable amount of spread before the excess spread in the transaction turns negative. Exhibit 13.11 shows a scenario in which excess spread deteriorates from an initial level of 9% to zero over a 36-month period. After 12 months, 3-month average excess spread falls to 5% and excess spread is getting trapped. 

In the following example, the spread account starts to trap excess spread when the 3-month average excess spread level is 5% or lower. As the excess spread level continues to decrease, the level of spread that is trapped increases to a maximum of 5% of the total transaction size. 

Nanoparticles of the semicondnctor titanium dioxide have also been spread as mono-layers [164]. Nanoparticles of TiOi were formed by the arrested hydrolysis of titanium iso-propoxide. A very small amount of water was mixed with a chloroform/isopropanol solution of titanium isopropoxide with the surfactant hexadecyltrimethylammonium bromide (CTAB) and a catalyst. The particles produced were 1.8-2.2 nm in diameter. The stabilized particles were spread as monolayers. Successive cycles of II-A isotherms exhibited smaller areas for the initial pressnre rise, attributed to dissolution of excess surfactant into the subphase. And BAM observation showed the solid state of the films at 50 mN m was featureless and bright collapse then appeared as a series of stripes across the image. The area per particle determined from the isotherms decreased when sols were subjected to a heat treatment prior to spreading. This effect was believed to arise from a modification to the particle surface that made surfactant adsorption less favorable. 

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