Credit enhancement
The devices that make an issue safer than the assets standing behind it: overcollateralisation, a reserve fund, a junior tranche, a third-party guarantee.
How to read the number
The rating of a securitisation almost never equals the quality of the pool. Enhancement is what makes the difference, and it belongs to the structure rather than being a bonus on top of it.
When the metric lies
Also known as: credit support, overcollateralisation