for the life of the floater). In contrast, the cap for an ABS floater depends on the perfor- mance of the underlying collateral. For ABS floaters, basis risk affects the excess spread available to pay the coupon rate for the bondholders. In the case of home equity loan-backed ABS and student loan ABS, the cap on the bondholders coupon is called the available funds cap. Typically, the large spread on the collateral loans compared to the spread offered on the bonds provides protection for ABS investors against basis risk. Where there is an available funds cap, typically there is a provision for carrying any interest shortfall resulting from the cap forward to future months. So, for example, suppose that in one month the full cou- pon rate would be 6.5% but the available fund cap restricts the coupon rate for that month to 6.2%. The 30 basis point difference between the full coupon rate and the rate due to the available funds cap is capital- ized and paid in a subsequent month (or months) when the funds are available to pay the bondholder. As a result, the presence of an available funds cap does not have the same impact on cash flow as a typical cap which does not have a catch-up provision.       CASH FLOW OF ASSET-BACKED SECURITIES   The collateral for an ABS can be classified as either amortizing or non- amortizing assets. Amortizing assets are loans in which the borrowers periodic payment consists of scheduled principal and interest payments over the life of the loan. The schedule for the repayment of the principal is called the amortization schedule. The standard residential mortgage loan falls into this category. Auto loans and certain types of home equity loans (specifically, closed-end home equity loans discussed later in this chapter) are amortizing assets. Any excess payment over the scheduled principal payment is called a prepayment. Prepayments can be made to pay off the entire balance or a partial prepayment, called a curtailment. In contrast to amortizing assets, non-amortizing assets do not have a schedule for the periodic payments that the borrower must make. Instead, a non-amortizing asset is one in which the borrower must make a minimum periodic payment. If that payment is less than the interest on the outstanding loan balance, the shortfall is added to the outstand- ing loan balance. If the periodic payment is greater than the interest on the outstanding loan balance, then the difference is applied to the reduc- tion of the outstanding loan balance. There is no schedule of principal payments (i.e., no amortization schedule) for a non-amortizing asset.     Consequently, the concept of a prepayment does not apply. Credit card receivables and certain types of home equity loans described later in this