according to a defined schedule. The schedule is maintained by using support bonds (also called companion bonds) that absorb the excess prepayments. Planned Amortization Class (PAC) bonds have a principal payment rate determined by two different prepayment rates, which together form a band (also called a collar). Early in the life of the CMO, the prepayment at the lower PSA will yield a lower prepayment. Later in the life, the principal in the higher PSA will have declined enough that it will yield a lower prepayment. The PAC tranche will receive whichever rate is lower, so it will change prepayment at one PSA for the first part of its life, then switch to the other rate. The ability to stay on this schedule is maintained by a support bond, which absorbs excess prepayments, and will receive less prepayments to prevent extension of average life. However, the PAC is only protected from extension to the amount that prepayments are made on the underlying MBSs. When the principal of that bond is exhausted, the CMO is referred to as a "busted PAC", or "busted collar". Target Amortization Class (TAC) bonds are similar to PAC bonds, but they do not provide protection against extension of average life. The schedule of principal payments is created by using just a single PSA. Very accurately defined maturity (VADM) bonds Very accurately defined maturity (VADM) bonds are similar to PAC bonds in that they protect against both extension and contraction risk, but their payments are supported in a different way. Instead of a support bond, they are supported by accretion of a Z bond. Because of this, a VADM tranche will receive the scheduled prepayments even if no prepayments are made on the underlying. Non-accelerating senior (NAS) NAS bonds are designed to protect investors from volatility and negative convexity resulting from prepayments. NAS tranches of bonds are fully protected from prepayments for a specified period, after which time prepayments are allocated to the tranche using a specified step down formula. For example, an NAS bond might be protected from prepayments for five years, and then would receive 10% of the prepayments for the first month, then 20%, and so on. Recently, issuers have added features to accelerate the proportion of prepayments flowing to the NAS class of bond in order to create shorter bonds and reduce extension risk. NAS tranches are usually found in deals that also