In securitisation, an early amortisation event (EAE) is an event that triggers the early repayment of a loan or other debt obligation. EAEs can occur for a number of reasons, including:
- Prepayment: If a borrower pays off their loan early, this can trigger an EAE.
- Default: If a borrower defaults on their loan, this can also trigger an EAE.
- Changes in the terms of the loan: If the terms of the loan are changed, this can also trigger an EAE.
- Events beyond the control of the borrower or lender: Events beyond the control of the borrower or lender, such as a natural disaster, can also trigger an EAE.