SECURITISATION OF DEBTS

Securitisation of financial assets, both mortgage-backed securities (MBS)

and asset-backed securities (ABS), is a form of structured finance initially
developed in the US in the early 1980’s and it developed into a huge
industry there alone.
 MEANING OF
SECURITISATION

“Securitisation” in the widest sense implies every such process which

converts a financial relation into’ a transaction. It is a device of structured
financing where an entity seeks to pool together its interest in identifiable
cash flows over time, transfers the same to investors either with or
without the support of further collaterals, and thereby achieve the
purpose of financing.
 Definition of Securitisation

Securitisation can be defined as a method of funding receivables of

whatever kind (mortgages, debts, leases, loans, credit card balances etc.).
It involves producing bearer assets- backed securities which can be freely
traded and secured on a portfolio of receivables.
MAJOR PLAYERS IN THE SECURITISATION GAME

1 ●
Originator

2 ●
Issuer

3 ●
Special Purpose Vehicle (SPV)

4 ●
Obligors or Originator’s Debtors

5 ●
Credit Rating Agency
CONTINUE…..

6 ●
Servicer

7 ●
Investors

8 ●
Agent and Trustee

9 ●
Credit Enhancer

10 ●
Legal Counsel