Asset-backed securities are bonds that are based on underlying pools of assets. A special purpose trust or instrument is set up which takes title to the assets and the cash flows are passed through to the investors in the form of an asset-backed security. The types of assets that can...
This article informs that the promotion surrounding the ease of use and access to capital through securitizations can be alluring and misleading. The fact is, securitizations can be exceedingly complex, time-consuming, and expensive solutions. These transactions are only for those who can justify the benefits of size and industry standing....
Securitization is a means of raising finance secured on the back of identifiable and predictable cash flows derived from a particular set of assets. Almost any assets that generate a predictable income stream can be securitized. The process of securitization involves the creation of a bankruptcy remote company known as...
A central objective of securitization is to de-link the risks inherent in the securitized assets from the operating and credit risk of the sponsor. Typically this involves structuring designed. This article discusses some of the principal issues related to the achievement of such delinkage in the context of securitizations by...
Securitization structures typically involve transfers of assets between a bank and its subsidiaries and may also involve other transactions with entities that control the bank or are under common control with the bank. This article talks about Regulation W, which requires banks to establish and maintain policies and procedures that...
Securitization of life insurance has been a hot topic since the demutualization wave in the mid-1990. At the time, tapping the capital markets to finance the ongoing operations after closing a book of business was the key way life insurers sought to utilize external finance. The introduction of Regulation Triple...
Securitization of the Master Settlement Agreement MSA payments from tobacco companies is hotly debated in states and policy circles. Securitization is issuing a bond backed by future payments in return for up-front money. Many public health advocates are strongly against securitization. However, securitization itself does not rob states of tobacco...
Asset Securitization facilitates 'on-balance sheet' lending to an 'off-balance sheet' income stream that improves return on capital and places fewer constraints on regulatory capital. The paper depicts that since the primary goal of asset securitization is to separate the credit risk of the originator from that of the underlying assets,...
From the executive summary: ‘Whole Company Securitization WCS, sometimes called whole business securitization or operating company securitization, is a more complex version of traditional securitization. A parent company isolates revenue-producing assets often the trademarks or patents that are the crown jewels of its intellectual property by selling them to a...
Securitization is one of the most important innovations of modern finance. The securitization process involves the isolation of a pool of assets or rights to a set of cash flows and the repackaging of the asset or cash flows into securities that are traded in capital markets. The objective of...
This paper explores the motivations and desirability of off-balance-sheet financing of credit card receivables by banks. It explore three related issues: the degree to which securitizations result in the transfer of risk out of the originating bank, the extent to which securitization permits banks to economize on capital by avoiding...
This article discusses the process by which the law of cross-border securitization evolves and becomes uniform. New forms of cross-border securitization and new legal issues emerge while old forms and settled issues solidify into rules. In the beginning, article defines the meaning of a unified cross-border securitization "law." It also...
Loan purchase and securitization by Freddie Mac, Fannie Mae and private-label commercial mortgage-backed securities CMBS grew rapidly during the 1990s and accounted for more than one-half of the net growth in multifamily debt over the decade. By facilitating the integration of the multifamily mortgage market into the broader capital markets,...
It is inferred from the article that the lender's role in the brave new world of securitized loans has changed; a lending enterprise may now sell its expertise in credit analysis and loan origination separately from its abilities to service loans over time or liquidate them when they default. Despite...
The purpose of property and casualty insurance is to spread, manage and absorb risk. It provides a mechanism for individuals and businesses exposed to possible loss to engage in risk reduction by pooling resources. Insurance provides a safety net that mitigates the effects of loss events and allows individuals and...
This article explores and explains the three approaches to accounting for securitization transactions. It also discusses how harmonization of these approaches might occur and the difficulties of achieving harmonization. It explores how accounting standards and their approaches to on- or off-balance sheet treatment might affect the securitization market and its...
Securitization has gained wide acceptance as an attractive financing alternative to other forms of borrowing such as bank debt and bond issuance. This technique can generate lower costs because, among other structural features, it is secured by the value of receivables and financial assets on the company balance sheet. Article...
The paper traces the history of bankruptcy related legal regulations in the US and examines recent changes and other issues in the bankruptcy domain. Securitization is an evolving mechanism towards handling bankruptcy. However, underlying laws does not drive it. Evolving the understanding of venue opportunities is an important consideration towards...
This paper presents a comprehensive framework for property/liability insurance risk management and securitization. It presents a rationale for P/L insurance risk management, describes and evaluates the four categories of P/L insurance risk management techniques: which are, maintaining internal capital within the organization, managing asset risk, managing underwriting risk, and managing...
The financial and insurance industries are in the process of convergence. While for the retail segment this has happened by combining the distribution channels of banking and insurance products especially life insurance, the convergence in the industrial area has taken the route of transferring insurance risks into the capital markets...
