What Is a Burrow Cast
A burrow cast is a structured finance term used to describe a projected cash flow scenario for a pool of assets. It models expected payments, defaults, and recoveries over time. The cast helps analysts and investors understand potential outcomes under different assumptions.
How a Burrow Cast Is Used
In credit analysis, a burrow cast is built from loan-level data, interest rates, and prepayment assumptions. It shows how principal and interest flow through tranches of a securitized product. This allows stakeholders to evaluate risk and expected returns before investing.
Why Burrow Cast Matters
A clear burrow cast supports better decision making for portfolio managers and risk teams. It highlights sensitivity to default rates, recovery rates, and spread changes. For more on structured finance analysis, see Investopedia.
