9.7 shows a CMO structure, Deal 4, created from the $400 million 7.5% coupon passthrough with a WAC of 8.125% and a WAM of 357 months. There are just two tranches in this structure: a 7.5% coupon PAC bond created assuming 90 to 300 PSA with a par value of $243.8 million, and a support bond with a par value of $156.2 million. The two speeds used to create a PAC bond are called the initial PAC col- lars (or initial PAC bands). For Deal 4, 90 PSA is the lower collar and 300 PSA the upper collar. Exhibit 9.8 reports the average life for the PAC bond and the support bond in Deal 4 assuming various actual prepayment speeds. Notice that between 90 PSA and 300 PSA, the average life for the PAC bond is stable at 7.26 years. However, at slower or faster PSA speeds the schedule is broken and the average life changes, lengthening when the prepayment speed is less than 90 PSA and shortening when it is greater than 300 PSA. Even so, there is much greater variability for the average life of the support bond. Most CMO PAC structures have more than one class of PAC bonds. Exhibit 9.9 shows six PAC bonds created from the single PAC bond in Deal 4. We will refer to this CMO structure as Deal 5. Information about this CMO structure is provided in Exhibit 9.9. The total par value of the six PAC bonds is equal to $243.8 million, which is the amount of the single PAC bond in Deal 4.     EXHIBIT 9.8 Average Life for PAC Bond and Support Bond in Deal 4 Assuming Various Prepayment Speeds   7.5   Total $400,000,000   Payment rules: 1. For payment of periodic coupon interest: Disburse periodic coupon interest to each tranche on the basis of the amount of principal outstanding at the beginning of the period. 2. For disbursement of principal payments: Disburse principal payments to tranches P-A to P-F based on their respective schedules of principal repayments. Tranche P-A has priority with respect to current and future principal payments to satisfy the schedule. Any excess principal payments in a month over the amount necessary to satisfy the schedule for tranche P-A are paid to tranche S. Once tranche P-A is com- pletely paid off, tranche P-B has priority, then tranche P-C, etc. When tranche S is completely paid off, all principal payments are to be made to the remaining PAC tranches in order of priority regardless of the schedule.     EXHIBIT 9.10 Average Life for PAC Bond and Support Bond in Deal 5 Assuming Various Prepayment Speeds