of the issuer to meet its interest obligation and repay principal as scheduled. We begin with the concept of gross portfolio yield. This yield includes finance charges collected and fees. Some issuers include inter- change in the computation of portfolio yield. Charge-offs represent the accounts charged off as uncollectible. Net portfolio yield is equal to gross portfolio yield minus charge-offs. Delinquencies are the percent- age of receivable that are past due a specified number of months. The monthly payment rate (MPR) expresses the monthly payment (which includes finance charges, fees, and any principal repayment) of a credit card receivable portfolio as a percentage of debt outstanding in the previous month. For example, suppose a $500 million credit card receiv- able portfolio in January realized $50 million of payments in February. The MPR would then be 10% ($50 million divided by $500 million). The MPR is an important statistic that is presented to investors in monthly credit card portfolio performance reports. An example is pre- sented in Exhibit 10.6 for four series (1999-A, 1999-B, 1999-C, and 2001- A) from the BA Master Credit Card Trust for July 2001 using Bloombergs     CCR function. Bloomberg displays monthly credit card portfolio perfor- mance reports for the leading credit card ABS issuers. Investors use the data to make assessments about how the underlying collateral is performing and to determine the likelihood that early amortization will be triggered. MPR is an important indicator for two reasons. With a low level of MPR, extension risk with respect to the principal payments may increase. Also a low MPR, indicating low cash flows to satisfy principal payments, may trigger early amortization of the principal.   Closed-End Home Equity Loan-Backed Securities A home equity loan (HEL) is a loan backed by residential property. At one time, the loan was typically a second lien on property that has already been pledged to secure a first lien. In some cases, the lien may be a third lien. In recent years, the character of a home equity loan has changed. Today, a home equity loan is often a first lien on property where the borrower has an impaired credit history so that the loan cannot qualify as a conforming loan for Ginnie Mae, Fannie Mae, or Freddie Mac. Typically, the borrower uses a home equity loan to consolidate consumer debt using the current home as collateral rather than to obtain funds to purchase a new home. Borrowers are segmented into four general credit quality groups, A, B, C, and D. There is no standard industrywide criteria for classifying a borrower.     Home equity loans can be either open end or closed end. An open- end home equity loan is discussed in the next section. A closed-end HEL