Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Buy Now $4.99
Standard view
Full view
of .
Look up keyword
Like this
12Activity
0 of .
Results for:
No results containing your search query
P. 1
securitisation

securitisation

Ratings: (0)|Views: 541 |Likes:
Published by Sachin Saini
SECURITISATION

Securitisation is the creation of asset backed securities. These are debt securities that are backed by a stream of cash flows.

The borrower issues debt securities that are repaid using only these cash flows. Buyers of these securities have no further recourse against the borrower if the cash flows prove insufficient.

Assets to be securitised are first sold to a special purpose vehicle (SPV), thus isolating the ultimate borrower from any claims for repayment. The SPV then issues bonds or other debt instruments. The SPV then uses the money raised by issuing the debt securities to pay the ultimate borrower for the assets.

The borrower has raised money without risking assets other than those held by the SPV and it has got a lump sum in return. It has lost some assets or cash flows in return for cash. The debt is also kept off the ultimate borrower's balance sheet. This is quite reasonable given the limited recourse. Securitisation can therefore be seen as a way of selling off a stream of cash flows.
SECURITISATION

Securitisation is the creation of asset backed securities. These are debt securities that are backed by a stream of cash flows.

The borrower issues debt securities that are repaid using only these cash flows. Buyers of these securities have no further recourse against the borrower if the cash flows prove insufficient.

Assets to be securitised are first sold to a special purpose vehicle (SPV), thus isolating the ultimate borrower from any claims for repayment. The SPV then issues bonds or other debt instruments. The SPV then uses the money raised by issuing the debt securities to pay the ultimate borrower for the assets.

The borrower has raised money without risking assets other than those held by the SPV and it has got a lump sum in return. It has lost some assets or cash flows in return for cash. The debt is also kept off the ultimate borrower's balance sheet. This is quite reasonable given the limited recourse. Securitisation can therefore be seen as a way of selling off a stream of cash flows.

More info:

Published by: Sachin Saini on Jun 12, 2009
Copyright:Attribution Non-commercial
List Price: $4.99 Buy Now

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
See more
See less

09/04/2013

$4.99

USD

pdf

You're Reading a Free Preview
Pages 2 to 6 are not shown in this preview.

Activity (12)

You've already reviewed this. Edit your review.
1 hundred reads
1 thousand reads
Ashish Goyal liked this
Sherin Titto liked this
Sherin Titto liked this
puretrust liked this
sourabh31 liked this
maggi23 liked this
tamirisaar liked this

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->