You are right- but it’s just a different description of the...

You are right- but it’s just a different description of the same thing. MME’s footnote "ability to co-invest in the junior notes” just means whether it has enough free cash to subscribe for the amount of junior notes insisted on by the providers of the external debt to the securitisation trust (SPV). I.e. enough free cash to be able to supply the required restricted cash buffer needed by the SPV.

The true equity in a SPV is tiny- say $100. MME (or similar principal) must provide the lowest ranked/highest risk tranche of funding into the SPV, so it suffers the first level of credit losses. This tranche is often called “equity” but strictly speaking it’s a debt tranche. This “equity” is nothing to do with, and not dependent upon, MME’s own shareholder equity.

MME buys the junior notes in the SPV for cash: the cash goes into the SPV as “restricted” and is held as a cash buffer by the SPV, which is controlled but not owned by the external lenders. The cash remains on MME’s consolidated balance sheet but the accounts have to distinguish between this and “free” cash outside the SPVs.

You probably know all this but I thought it worth clarifying for other readers, as it’s the fundamental determinant of how quickly MME can write new business.