Accrual bond in CMO

Dear All:

Could you pleaase give some ideas about the accrual bond in CMO. I have read many times but still not clear about the tranche process.

thank you so much for your time.

Accrual bond in CMO is bond that does not get paid Interest or Principal, but the Interest on the bond is rather accrued. I think the principal and the interest gets paid together at the end.

With the accrual bond there are no intermediate cash flows. From the inverstor’s perspective, there are only two cash flows, at the beginning - ouflow and at the end - inflow. All intermediate interests are added to the principal. The interest rate is the coupon rate.