abhishreshthaa
Abhijeet S
INTRODUCTION
Securitization is the process of pooling and packaging financial assets, usually relatively illiquid, into liquid marketable securities.
Securitization allows an entity to assign (i.e. sell) its interest in a pool of financial assets (and the underlying security) to other entities.
PARTIES INVOLVED
The initial owner of the asset (the originator or sponsor) who has a loan agreement with the borrowers
The issuer of debt instruments who also is the SPVs
The investment bankers, who assist in structuring the transaction and who underwrite or place the securities for a fee
The rating agencies, who assess credit quality of certain type of securities and assign a credit rating
The credit enhancer, possibly a bank, surety company or insurer, who provides credit support through a letter of credit, guarantee etc
The servicer, usually the originator, who collects payments due on the underlying assets and after retaining a servicing fee, pays them over to the security holders
The trustee, who deals with issuer, credit enhancer and servicer on behalf of the security holders
The legal counsel, who participates in the structuring of the transaction
The swap counter party, who provides interest rate / currency swap
Securitization is the process of pooling and packaging financial assets, usually relatively illiquid, into liquid marketable securities.
Securitization allows an entity to assign (i.e. sell) its interest in a pool of financial assets (and the underlying security) to other entities.
PARTIES INVOLVED
The initial owner of the asset (the originator or sponsor) who has a loan agreement with the borrowers
The issuer of debt instruments who also is the SPVs
The investment bankers, who assist in structuring the transaction and who underwrite or place the securities for a fee
The rating agencies, who assess credit quality of certain type of securities and assign a credit rating
The credit enhancer, possibly a bank, surety company or insurer, who provides credit support through a letter of credit, guarantee etc
The servicer, usually the originator, who collects payments due on the underlying assets and after retaining a servicing fee, pays them over to the security holders
The trustee, who deals with issuer, credit enhancer and servicer on behalf of the security holders
The legal counsel, who participates in the structuring of the transaction
The swap counter party, who provides interest rate / currency swap