Module VI· Cash Sweep ModelingAdvanced
Question

How do you model pari passu sweep between multiple tranches?

Answer

Pari passu sweep allocates repayment pro rata across eligible tranches rather than sequentially. Calculate each tranche's share of total eligible debt, then multiply total sweep amount by that share, capped by each tranche balance. This preserves equal ranking. Add checks that total repayment equals sweep amount and no tranche goes negative.