How do Junior Notes work?
For each loan, AltX establishes a Special Purpose Vehicle (SPV) that makes the loan to the borrower and holds the registered first mortgage.
In a Junior Note structure, the SPV issues two classes of Notes:
Senior Notes – rank first for repayment of interest and capital.
Junior Notes – rank behind Senior Notes for repayment.
Both classes are secured by the same first mortgage but have different risk and return characteristics.