A manager from the structured credit risk desk at a bank is presenting to a group of newly hired risk analysts on calculating cash flows in a securitization structure. The manager illustrates the procedure with the existing collateral pool of loans and the corresponding liabilities, all with a maturity of 5 years, using the following information:

Initial number of loans in the collateral pool	100
Principal amount of each loan	EUR 1,000,000
Total coupon interest to be paid annually on all junior and senior bonds	EUR 6,300,000
Maximum annual amount flowing from the excess spread into the overcollateralization account	EUR 1,500,000
Swap rate per year for all maturities	3.5%
Recovery rate in the event of a loan default	45%

The manager makes additional observations as follows:

• The loans in the collateral pool pay a fixed spread of 2.2% over the swap curve.
• There were no defaults in year 1.
• The value of the overcollateralization account at the end of year 1 was EUR 0.

What is the value of the overcollateralization account at the end of year 2 if there are 8 defaults in year 2?