Name : Miss Ramaa Vijay Sardesai

Class : M. Com Part I

Roll No:1017
Subject: Management Of Financial Services
Securitization
What is securitization:
Securitization is the procedure whereby an issuer designs
a financial instrument by merging various financial assets
and then markets tiers of the repackaged instruments to
investors. This process can encompass any type of
financial asset and promotes liquidity in the marketplace.
Process Of Securitization:
3
Merchant 4 a
SPV 8 Originator
Banker

Credit 6
Rating
b
Agency
5
7

Credit c
Investor
Enhancer 12 2
9 1
10
11 servicer Obligator
Process Of Securitization:
1) Obligor will approach Originator for loan
2) Originators will Sanction loan to the Obligor.
3) Then Originators will Transfer Legal and beneficial
interest in the asset to SPV.
4) a) SPV will decide about the market time & Pricing
with Merchant Banker .
b)SPV will tell Credit rating Agency to Assign rating
to ABS.
c) SPV will approach to credit enhancer to guarantee
incase Obligor defaults in payment .
5) SPV will issue instruments in capital market to
investors.
6) Investors will subscribe for instruments and pays
money.
7) SPV Issues Certificate to the investors.
 8)SPV transfers the funds to originator.
9) SPV appoints servicer .
10) Servicer collects the amount due from Obligor.
11)Servicer pays collected amount to SPV.
Conclusion
So I conclude that Securitization is a structured
financial transaction . It is one of the mode of
financing and also enhances liquidity. It also helps in
portfolio diversification.
References
 Websites :
o https://www.investopedia.com
o https://www,slideshare.net

 Books:
o Management Of Financial Services , Markets and
Institutions By O.P.Agarwal