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Description: OA special type
of bond class in a sequential pay collateralized mortgage obligation.
This class of bond does not receive any interest or principal payments
until all other tranches have been completely paid off. In a Z-tranche,
the interest that is not paid is accrued and added to the principal for
future interest calculation purposes.
The main purpose of the Z-tranche is to speed up the maturity of the senior
tranches by disbursing payment that the Z-tranche was suppose to receive
to the higher priority tranches. Investors that possess long-term liabilities
or those who worry about reinvestment risk would benefit from investing
in a Z-tranche bond.