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The Securitization Process

Asset-Backed Securities The Securitization Process Prof. Ian Giddy Stern School of Business New York University Asset-Backed Securities q The basic idea q What's needed? q The technique q Applications q Typical sequence Copyright 2001 Ian H. Giddy The Securitization Process3. Securitization of Assets q Securitization is the transformation of an illiquid asset into a security. q For example, a group of consumer loans can be transformed into a publically-issued debt security. q A security is tradable, and therefore more liquid than the underlying loan or receivables. Securitization of assets can lower risk, add liquidity, and improve economic efficiency. q Sometimes,assets are worth more off the balance sheet than on it.

RECEIVABLE ACCOUNTS RECEIVABLE ISSUES ASSET -BACKED CERTIFICATES SALE OR ASSIGNMENT CREDIT ENHANCEMENT CREDIT ENHANCEMENT SOVEREIGN ... Hire -Purchase Agreement Credit Enhancement: Guarantee Method. ... account the rating process.

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  Agreement, Account, Purchase, Receivable, Purchase agreement

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