It stands for component interest only; a type of CMBS (commercial mortgage-backed security) that is formed by combining a weighted average coupon interest only (WAC IO) with notional interest only (notional IO). The WAC IO is stripped from the collateral and the notional IO is stripped from the bond classes. Changes in the collateral WAC do not impact the notional IO as the WAC IO absorbs changes once occurred.
March 17, 2025
