First-loss piece

Of the total spread of the assets available to fund the tranches of liabilities in this example, fully 68.33% goes to the first loss piece even though this piece only represents 5% of the total potential loss. Meanwhile, a mere 7% of the available 15 million asset spread accrues to the most senior 70% of the capital structure. As with all CDOs, in this synthetic deal the senior tranches are providing leverage to the junior tranches in exchange for safety. 

A key benefit of securitization notes is the ability to tailor risk—return profiles. For example, if there is a lack of assets of any specific credit rating, these can be created via securitization. Securitized notes frequently offer better risk—reward performance than corporate bonds of the same rating and maturity. While this might seem peculiar (why should one AA-rated bond perform better in terms of credit performance than another just because it is asset-backed ), this often occurs because the originator holds the first-loss piece in the structure. 

As illustrated in Figure 15.1, in a securitization the issued notes are structured to reflect specified risk areas of the asset pool, and thus are rated differently. The senior tranche is usually rated AAA. The lower-rated notes usually have an element of overcollateralization and are thus capable of absorbing losses. The most junior note is the lowest rated or nonrated. It is often referred to as th.t first-loss piece, because it is impacted by losses in the underlying asset pool first. The first-loss piece is sometimes called the equity piece or equity note (even though it is a bond) and is usually held by the originator. 

ISO 176 [179] consists of two methods for quantitatively determining the loss in mass of a plastic in the presence of activated carbon when it is subjected to given temperature and time conditions. In Method A, the test material is in direct contact with the carbon. This method is particularly suited to materials that must be tested at low temperatures because they flow at higher temperatures. Method B, on the other hand, has the test material placed in a wire cage to prevent direct contact with the carbon. In both methods the standard test piece is a disk 50 mm diameter by I mm thick, although other dimensions are allowed where other factors make this necessary. For Method A, the test pieces are weighed and the thickness recorded before they are placed in a metal container containing a bed of 120 cm of activated carbon. A further 120 cm of carbon is then placed on top of the first test piece, and then the second test piece is placed on this. The process is repeated... 

There is one further piece of kinetic evidence which throws light on an aspect of the benzidine rearrangement mechanism, and this is comparison of the rates of reaction of ring-deuterated substrates with the normal H compounds. If the final proton-loss from the benzene rings is in any way rate-determining then substitution of D for H would result in a primary isotope effect with kD < kH. This aspect has been examined in detail42 for two substrates, hydrazobenzene itself where second-order acid dependence is found and l,l -hydrazonaphthalene where the acid dependence is first-order. The results are given in Tables 2 and 3. 

Ascorbic acid is probably the most labile bioactive compound in fruit juices and fruit and vegetable pieces, as we described in the first part of this chapter. Retention of this phytochemical after the nonthermal treatments ranged from 47% to 100%, depending on the intensity of the applied treatment and the product. For example, the greatest losses of vitamin C were found in fresh-cut red lettuce and melon treated with IR and HHP (Fan and others 2008 Wolbang and others 2008), respectively. However, the use of gamma radiation in various vegetables retained 100% of their total ascorbic acid content (Fan and others 2008). 

One of the first pieces of evidence for the mechanism of this reaction involved an attempt to develop a new assay for the activity of tyrosine synthase, which converts phenylalanine to tyrosine. A tritium was placed in the para position of phenylalanine, and it was assumed that oxidation of this position would lead to the loss of tritium and the rate of this loss would be a measure of the activity of the enzyme (Fig. 4.76). 

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