waterfall > define
noun
- A steep descent of the water of a river.
- synonyms: falls
by WordNet 3.0 © 2006 by Princeton University
waterfall is the contractual distribution of principal and interest cash flows in a multi-tranche security such as an ABS, CMO or CDO. The contractually specified allocation of cash to debt holders and other parties. The priority of payments to holders of different classes of securities created from a securitization.