In the context of
securitisations, a bond factor is the ratio of the current stated amount of a class of
debt securities to the original stated amount of the class. The bond factor is used to calculate the amount of
principal that will be repaid to investors in the event of a default on the underlying assets.
The bond factor is determined based on various factors, including the characteristics of the underlying assets, the structure of the securitization transaction, and the priority of cash flow distributions. It is calculated using complex models that consider parameters such as interest rates, prepayment rates, default rates, and recovery rates.