Securitization | Mohit Sewak

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01 Jan

TERIM Model of Securitization: How is Securitization Done ?

Posted by Mohit Sewak Category: Finance, Securitization

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TERIM Model of Securitization

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How is Securitization Done ?

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In the earlier posts we had discussed what is Securitization, why it is required, and some of the terms related to Securitization like CDO/ ABS/ CLO/ CDS, SPV/ SPE/ SPT etc. Now its time to understand all the steps involved in carrying out any securitization.

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All the steps involved in any securitization (modern or traditional) can be technically classified into 5 steps which have to occur in the given order one after another. These 5 steps are parts of the model called TERIM:

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1. T- Transfer

2. E- Enhance

3. R- Rate

4. I- Issue

5. M- Manage

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To explain the process completely I have written separate notes on each of them, but those who are in a hurry, here is a short summary of each step (for detailed posts click on step headings below).

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Transfer

As we discussed earlier the securtization initially started with the sole purpose of waving the loans (asset backed mortgaged loans) from the balance sheets of the bank where these loans were originated. Also the bank need to be isolated from any risk arising from the failure of these loans. Also the asset that are linked with this loan need to be backed up against any future claims that comes on the bank. For this purpose a Special Purpose Vehicle (SPV) is created, and these loans are TRANSFERRED from the balance sheets of the bank to that of the SPV’s.

For more information on this step read the post: – TERIM Step 1: Transfer.

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Enhance

These asset backed loans after being detached from their originating bank, become very risky at this stage, and hence are not investment worthy. So in order to reduce the risk associated with them they have to be ENHANCED. Enhancement is like an Insurance in which you pay a premium to an Insurance firm for covering any damages that arise due to the failure of these loans.

For more information on this step read the post: – TERIM Step 2: Enhance.

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Rate

In order to recognize these loans as investment worthy, they require to a credit rating above B (AAA to A). After getting Insurance/ Enhancement for these loans in the above step we have reduced some risks from them, and now we get them rated by a rating agency like Moody’s/ S&P etc. Only after they rate them as AAA, AA, A can they be securitized.

For more information on this step read the post: – TERIM Step 3: Rate.

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Issue

We have carried out so many procedures just to securitize out asset backed loans (to get asset backed securities from them). This is finally the step where Securities are ISSUED from the above rated (& enhanced) mortgage backed loans to the the investors. This although sounds simple but is a aggregation of several other steps which will be covered in the dedicated post (link below).

For more information on this step read the post: – TERIM Step 4: Issue.

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Manage

If you have already gone through the detailed procedure involved in the above 4 steps, you must have realized that several routine steps are to be carried out every year for the maintainence of the original asset backed loans to ensure that creditors pay their investments on time, and the same is being transferred into the accounts of the concerned parties. Despite after so many steps the loan has been fragmented into numerous securities, some body is required to carry out the above stated and many other steps till the loan does not reach maturity. In short somebody is required to MANAGE these securities and the original loan

For more information on this step read the post: – TERIM Step 5: Manage

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What is a Bankruptcy Remote Entity (BRE) ?

Posted by Mohit Sewak Category: Finance, Securitization

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What is a Bankruptcy Remote Entity (BRE) ?

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A Bankuptcy Remote Entity (BRE), also called a Special Purpose Vehicle (SPV), is a financial/ legal entity created to isolate the risk of the parent firm from a risky activity/ project that it wants to undertake.

Although the above definition seems very crude, but technically speaking it captures the essence of all the uses that an SPV can be used for. Based on the specific uses, the name changes a bit, and the path to reach the desired goal (of isolating the parent company from a perceived high risk instrument/ activity) may vary. To describe the same in detail we will some of the examples of SPV’s in use.

.

Example 1: – High Risk/ High Leverage Project Financing

.

Suppose you have a highly leveraged international green infrastructure project underway. Obviously it contains many risks ranging from financial, country, and foreign exchange risks. No company would like to see an impact of financing/ guarantying such a project on its share prices. The investors invested in this company anticipating a particular maximum risk, and if the risk of the firm increases due to financing such risky projects (and obviously the present returns are not in proportion to the increased risks of the new project) they will definitely not like this.

Even otherwise also, a successful company would not like to risk its present successfully running business for a new extension. To solve this problem the firm does not takes a loan on its own name, but instead forms a sort of limited company with contracts that ensures that the present/ parent firm will not be obliged to pay the creditors of this daughter/ limited company, if it were not able to fulfill its obligations if it were to declare bankruptcy (and vice-versa: – that is that if under any condition if the parent firm were to go bankrupt, its creditors cannot sue the daughter firm for the claims, and hence the project is also safe from the underlying risks of the parent firm, if any).

Now, with the two firms being isolated from any financial risks/ cross claims, the loan/ debts are taken for the project on the name of this daughter firm, also call a Special Purpose Entity (SPE) (as it is a financial entity created for a special purpose), or a Bankruptcy-Remote Entity (BRE) (As it is keeping remote any bankruptcy claims of the daughter company to the parent company and vice versa), or can simply be called a Special Purpose Vehicle (SPV).

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Example 2: – Securitization of Risky Loans/ Mortgage Instruments.

.

As we discussed in our last post (What is Securitization ?), no bank would like to keep the mortgaged loans in it’s own books. Not only will it lock the bank’s loanable funds, and hence hit its profit margins severely, but also as banks will not like to carry such risky loans (as they contain many sub-prime loans as well : we will discuss about sub prime loans and sub prime crisis in another post) in it’s own book because it wants to maintain a good Capital Adequacy Ratio (CAR) to adhere to the Basel (I and II) norms, while also not missing a chance to earn from these profitable instruments.

To achieve these twin objectives, the Bank creates a Special Purpose Vehicle (SPV), and transfer all these mortgage backed loans into the books of this new entity to relieve itself of any liabilities arising of these instruments.

Obviously making a limited company and having a parent-daughter relation here will not work, and the bank will not be able to shirk off all its obligations completely. So, in this case, instead of a limited company, a Special Purpose Trust (SPT) is made in this case (whose status is mostly of an orphan trust, with its shares held by a charitable trust), that have an independent professional Director who is not attached with the Bank.

Thus now both the entities (Bank and the SPT/ SPV) are isolated from each other for all regulatory, accounting, and bankruptcy purposes.

.

Technically speaking, the term SPV is the general term for any such entity, and all other terms are used as specific instances to clarify the need for its formation, but now a days it can be used interchangeably with the below mentioned names: -

.

1. Special Purpose Vehicle (SPV)

2. Special Purpose Entity (SPE)

3. Special Purpose Trust (SPT) (as called in US)

4. Variable Interest Entity (VIE) (as used by the United States Financial Accounting Standards Board)

5. Bankruptcy Remote Entity (BRE)

6. Special Purpose Company (SPC) (or SPT as called in Japan).

7. Special Purpose Acquisition Company (SPAC)

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What is a Special Purpose Company (SPC) ?

Posted by Mohit Sewak Category: Finance, Securitization

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What is a Special Purpose Company (SPC) ?

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A Special Purpose Comapny (SPC), also called a Special Purpose Vehicle (SPV), is a financial/ legal entity created to isolate the risk of the parent firm from a risky activity/ project that it wants to undertake.

Although the above definition seems very crude, but technically speaking it captures the essence of all the uses that an SPV can be used for. Based on the specific uses, the name changes a bit, and the path to reach the desired goal (of isolating the parent company from a perceived high risk instrument/ activity) may vary. To describe the same in detail we will some of the examples of SPV’s in use.

.

Example 1: – High Risk/ High Leverage Project Financing

.

Suppose you have a highly leveraged international green infrastructure project underway. Obviously it contains many risks ranging from financial, country, and foreign exchange risks. No company would like to see an impact of financing/ guarantying such a project on its share prices. The investors invested in this company anticipating a particular maximum risk, and if the risk of the firm increases due to financing such risky projects (and obviously the present returns are not in proportion to the increased risks of the new project) they will definitely not like this.

Even otherwise also, a successful company would not like to risk its present successfully running business for a new extension. To solve this problem the firm does not takes a loan on its own name, but instead forms a sort of limited company with contracts that ensures that the present/ parent firm will not be obliged to pay the creditors of this daughter/ limited company, if it were not able to fulfill its obligations if it were to declare bankruptcy (and vice-versa: – that is that if under any condition if the parent firm were to go bankrupt, its creditors cannot sue the daughter firm for the claims, and hence the project is also safe from the underlying risks of the parent firm, if any).

Now, with the two firms being isolated from any financial risks/ cross claims, the loan/ debts are taken for the project on the name of this daughter firm, also call a Special Purpose Entity (SPE) (as it is a financial entity created for a special purpose), or a Bankruptcy-Remote Entity (BRE) (As it is keeping remote any bankruptcy claims of the daughter company to the parent company and vice versa), or can simply be called a Special Purpose Vehicle (SPV).

.

Example 2: – Securitization of Risky Loans/ Mortgage Instruments.

.

As we discussed in our last post (What is Securitization ?), no bank would like to keep the mortgaged loans in it’s own books. Not only will it lock the bank’s loanable funds, and hence hit its profit margins severely, but also as banks will not like to carry such risky loans (as they contain many sub-prime loans as well : we will discuss about sub prime loans and sub prime crisis in another post) in it’s own book because it wants to maintain a good Capital Adequacy Ratio (CAR) to adhere to the Basel (I and II) norms, while also not missing a chance to earn from these profitable instruments.

To achieve these twin objectives, the Bank creates a Special Purpose Vehicle (SPV), and transfer all these mortgage backed loans into the books of this new entity to relieve itself of any liabilities arising of these instruments.

Obviously making a limited company and having a parent-daughter relation here will not work, and the bank will not be able to shirk off all its obligations completely. So, in this case, instead of a limited company, a Special Purpose Trust (SPT) is made in this case (whose status is mostly of an orphan trust, with its shares held by a charitable trust), that have an independent professional Director who is not attached with the Bank.

Thus now both the entities (Bank and the SPT/ SPV) are isolated from each other for all regulatory, accounting, and bankruptcy purposes.

.

Technically speaking, the term SPV is the general term for any such entity, and all other terms are used as specific instances to clarify the need for its formation, but now a days it can be used interchangeably with the below mentioned names: -

.

1. Special Purpose Vehicle (SPV)

2. Special Purpose Entity (SPE)

3. Special Purpose Trust (SPT) (as called in US)

4. Variable Interest Entity (VIE) (as used by the United States Financial Accounting Standards Board)

5. Bankruptcy Remote Entity (BRE)

6. Special Purpose Company (SPC) (or SPT as called in Japan).

7. Special Purpose Acquisition Company (SPAC)

.
.

What is a Special Purpose Entity (SPE) ?

Posted by Mohit Sewak Category: Finance, Securitization

.

What is a Special Purpose Entity (SPE) ?

.

A Special Purpose Entity (SPE), also called a Special Purpose Vehicle (SPV), is a financial/ legal entity created to isolate the risk of the parent firm from a risky activity/ project that it wants to undertake.

Although the above definition seems very crude, but technically speaking it captures the essence of all the uses that an SPV can be used for. Based on the specific uses, the name changes a bit, and the path to reach the desired goal (of isolating the parent company from a perceived high risk instrument/ activity) may vary. To describe the same in detail we will some of the examples of SPV’s in use.

.

Example 1: – High Risk/ High Leverage Project Financing

.

Suppose you have a highly leveraged international green infrastructure project underway. Obviously it contains many risks ranging from financial, country, and foreign exchange risks. No company would like to see an impact of financing/ guarantying such a project on its share prices. The investors invested in this company anticipating a particular maximum risk, and if the risk of the firm increases due to financing such risky projects (and obviously the present returns are not in proportion to the increased risks of the new project) they will definitely not like this.

Even otherwise also, a successful company would not like to risk its present successfully running business for a new extension. To solve this problem the firm does not takes a loan on its own name, but instead forms a sort of limited company with contracts that ensures that the present/ parent firm will not be obliged to pay the creditors of this daughter/ limited company, if it were not able to fulfill its obligations if it were to declare bankruptcy (and vice-versa: – that is that if under any condition if the parent firm were to go bankrupt, its creditors cannot sue the daughter firm for the claims, and hence the project is also safe from the underlying risks of the parent firm, if any).

Now, with the two firms being isolated from any financial risks/ cross claims, the loan/ debts are taken for the project on the name of this daughter firm, also call a Special Purpose Entity (SPE) (as it is a financial entity created for a special purpose), or a Bankruptcy-Remote Entity (BRE) (As it is keeping remote any bankruptcy claims of the daughter company to the parent company and vice versa), or can simply be called a Special Purpose Vehicle (SPV).

.

Example 2: – Securitization of Risky Loans/ Mortgage Instruments.

.

As we discussed in our last post (What is Securitization ?), no bank would like to keep the mortgaged loans in it’s own books. Not only will it lock the bank’s loanable funds, and hence hit its profit margins severely, but also as banks will not like to carry such risky loans (as they contain many sub-prime loans as well : we will discuss about sub prime loans and sub prime crisis in another post) in it’s own book because it wants to maintain a good Capital Adequacy Ratio (CAR) to adhere to the Basel (I and II) norms, while also not missing a chance to earn from these profitable instruments.

To achieve these twin objectives, the Bank creates a Special Purpose Vehicle (SPV), and transfer all these mortgage backed loans into the books of this new entity to relieve itself of any liabilities arising of these instruments.

Obviously making a limited company and having a parent-daughter relation here will not work, and the bank will not be able to shirk off all its obligations completely. So, in this case, instead of a limited company, a Special Purpose Trust (SPT) is made in this case (whose status is mostly of an orphan trust, with its shares held by a charitable trust), that have an independent professional Director who is not attached with the Bank.

Thus now both the entities (Bank and the SPT/ SPV) are isolated from each other for all regulatory, accounting, and bankruptcy purposes.

.

Technically speaking, the term SPV is the general term for any such entity, and all other terms are used as specific instances to clarify the need for its formation, but now a days it can be used interchangeably with the below mentioned names: -

.

1. Special Purpose Vehicle (SPV)

2. Special Purpose Entity (SPE)

3. Special Purpose Trust (SPT) (as called in US)

4. Variable Interest Entity (VIE) (as used by the United States Financial Accounting Standards Board)

5. Bankruptcy Remote Entity (BRE)

6. Special Purpose Company (SPC) (or SPT as called in Japan).

7. Special Purpose Acquisition Company (SPAC)

.
.

What is a Special Purpose Vehicle (SPV) ?

Posted by Mohit Sewak Category: Finance, Securitization

.

What is a Special Purpose Vehicle (SPV) ?

.

A Special Purpose Vehicle (SPV), is a financial/ legal entity created to isolate the risk of the parent firm from a risky activity/ project that it wants to undertake.

Although the above definition seems very crude, but technically speaking it captures the essence of all the uses that an SPV can be used for. Based on the specific uses, the name changes a bit, and the path to reach the desired goal (of isolating the parent company from a perceived high risk instrument/ activity) may vary. To describe the same in detail we will some of the examples of SPV’s in use.

.

Example 1: – High Risk/ High Leverage Project Financing

.

Suppose you have a highly leveraged international green infrastructure project underway. Obviously it contains many risks ranging from financial, country, and foreign exchange risks. No company would like to see an impact of financing/ guarantying such a project on its share prices. The investors invested in this company anticipating a particular maximum risk, and if the risk of the firm increases due to financing such risky projects (and obviously the present returns are not in proportion to the increased risks of the new project) they will definitely not like this.

Even otherwise also, a successful company would not like to risk its present successfully running business for a new extension. To solve this problem the firm does not takes a loan on its own name, but instead forms a sort of limited company with contracts that ensures that the present/ parent firm will not be obliged to pay the creditors of this daughter/ limited company, if it were not able to fulfill its obligations if it were to declare bankruptcy (and vice-versa: – that is that if under any condition if the parent firm were to go bankrupt, its creditors cannot sue the daughter firm for the claims, and hence the project is also safe from the underlying risks of the parent firm, if any).

Now, with the two firms being isolated from any financial risks/ cross claims, the loan/ debts are taken for the project on the name of this daughter firm, also call a Special Purpose Entity (SPE) (as it is a financial entity created for a special purpose), or a Bankruptcy-Remote Entity (BRE) (As it is keeping remote any bankruptcy claims of the daughter company to the parent company and vice versa), or can simply be called a Special Purpose Vehicle (SPV).

.

Example 2: – Securitization of Risky Loans/ Mortgage Instruments.

.

As we discussed in our last post (What is Securitization ?), no bank would like to keep the mortgaged loans in it’s own books. Not only will it lock the bank’s loanable funds, and hence hit its profit margins severely, but also as banks will not like to carry such risky loans (as they contain many sub-prime loans as well : we will discuss about sub prime loans and sub prime crisis in another post) in it’s own book because it wants to maintain a good Capital Adequacy Ratio (CAR) to adhere to the Basel (I and II) norms, while also not missing a chance to earn from these profitable instruments.

To achieve these twin objectives, the Bank creates a Special Purpose Vehicle (SPV), and transfer all these mortgage backed loans into the books of this new entity to relieve itself of any liabilities arising of these instruments.

Obviously making a limited company and having a parent-daughter relation here will not work, and the bank will not be able to shirk off all its obligations completely. So, in this case, instead of a limited company, a Special Purpose Trust (SPT) is made in this case (whose status is mostly of an orphan trust, with its shares held by a charitable trust), that have an independent professional Director who is not attached with the Bank.

Thus now both the entities (Bank and the SPT/ SPV) are isolated from each other for all regulatory, accounting, and bankruptcy purposes.

.

Technically speaking, the term SPV is the general term for any such entity, and all other terms are used as specific instances to clarify the need for its formation, but now a days it can be used interchangeably with the below mentioned names: -

.

1. Special Purpose Vehicle (SPV)

2. Special Purpose Entity (SPE)

3. Special Purpose Trust (SPT) (as called in US)

4. Variable Interest Entity (VIE) (as used by the United States Financial Accounting Standards Board)

5. Bankruptcy Remote Entity (BRE)

6. Special Purpose Company (SPC) (or SPT as called in Japan).

7. Special Purpose Acquisition Company (SPAC)

.
.

What is Securitization?

Posted by Mohit Sewak Category: Finance, Securitization

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What is Securitization?

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Securitization is the process of issuing securities against mortgaged (asset backed) loans. Such securities can in turn be called:

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1. Asset Backed Securities (ABS), or

2. Asset Backed Obligations, or

3. Mortgage Backed Securities (MBS), or

4. Mortgage Backed Obligations, or

5. Collateralized Debt Obligations (CDO), or

6. Collateralized Debt Securities (CDS), or

7. Collateralized Loan Obligations (CLO), or

8. Collateralized Mortgage Obligations (CMO).

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Securitization is one of the methods to reduce the risk in such loans by risk pooling (a concept meaning that the average risk per entity reduces when a number of entities pool in to share a common, and fixed risk).

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Reasons for and advantages of Securitization:

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Securitizatuiion started back in early 70’s, in the US, with an intent to provide liquidity to the banks, so that they could provide more mortgage loans for buying assets/ houses, and hence increase the depth of the banking system, and also provide an opportunity to the common Americans to own a home.

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Any commercial bank (whether in United States or any part of the World), after reserving the assets required by all the regulations (as CRR- Cash Reserve Ratio, SLR- Statutory Liquidity Ratio, etc.) of the Central/ Federal Bank’s, is left with typically only 70%-75% of it’s total assets as loanable reserves. As a typical duration of a mortgage backed loan can range from a period of 10-30 years, it implies that a bank’s loanable money is locked for the next 30years say, and it can give no further loan for such a long period if it were to carry all the previously given loans into its books (as loan assets).

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Therefore Securitization helped banks to remove such loans from its books, so that it can give further loans to the needful, (while also complying with the percentage cash, and liquidity reserve ratios as required by the central/ federal bank) thus serving the twin purpose of:

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1. Increasing its own profit, by in effect, being able to give larger amount of loans than stipulated by the central bank:

2. Increasing the depth of Mortgage loan, and Real Estate/ Housing market in the country, by providing more loans (at a reasonable rate of interest) for such purpose.

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What is a Collateralized Debt Security (CDS) ?

Posted by Mohit Sewak Category: Finance, Securitization

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What is a Collateralized Debt Security (CDS) ?

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.
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Going by the dictionary meanings, Collateralized Debt Security or a CDS, should have meant any loan, or security, taken against a collateral (anything to back up a loan, for eg. an asset as a mortgage).

But in structured finance (a sector of finance that was created to help transfer risk using complex legal and corporate entities), we take this definition a step forward to call any security formed/ derived (these come under financial derivatives) as a result of securitization of such underlying mortgage backed loans/ debts/ fixed-income assets as CDS’s.
.

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Therefore the technical definition of CDSs would be:

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Collateralized Debt Securities (CDSs) are a type of structured asset-backed security (ABS) whose value and payments are derived from a portfolio of fixed-income underlying assets.

.

Some other names by which these securities are called are (There can be minute or no differences among such terms which we will be discussing later, but broadly speaking they all mean the same thing):

.

1. Asset Backed Securities (ABS), or

2. Asset Backed Obligations, or

3. Mortgage Backed Securities (MBS), or

4. Mortgage Backed Obligations, or

5. Collateralized Debt Securities (CDS), or

6. Collateralized Loan Obligations (CLO), or

7. Collateralized Mortgage Obligations (CMO).

.

These asset backed securities can be further re-securitized to form CDO² (CDO Squares), which in turn can be further re-re-securitized to form CDO³ (CDO Cubes), and so on. This is a complicated process and will be discussed in a separate post.

.
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What is an Asset Backed Obligation (ABO) ?

Posted by Mohit Sewak Category: Finance, Securitization

.
.
.

What is an Asset Backed Obligation (ABO) ?

.
.
.

Going by the dictionary meanings, Asset-Backed Obligation or an ABO, should have meant any loan, or security taken against any asset kept as a collateral (anything to back up a loan, for eg. a mortgage). But in structured finance (a sector of finance that was created to help transfer risk using complex legal and corporate entities), we take this definition a step forward to call any security formed/ derived (these come under financial derivatives) as a result of securitization of such underlying mortgage backed loans/ debts/ fixed-income assets as ABO’s.
.

.

Therefore the technical definition of an ABO would be:

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An Asset-Backed Obligation is a security whose value and income payments are derived from and collateralized (or “backed”) by a specified pool of underlying assets.

This pool of assets is typically a group of small and illiquid assets that are unable to be sold individually.

.

Some other names by which these securities are called are (There can be minute or no differences among such terms which we will be discussing later, but broadly speaking they all mean the same thing):

.

1. Asset Backed Securities (ABS), or

2. Mortgage Backed Securities (MBS), or

3. Mortgage Backed Obligations, or

4. Collateralized Debt Obligations (CDO), or

5. Collateralized Debt Securities (CDS), or

6. Collateralized Loan Obligations (CLO), or

7. Collateralized Mortgage Obligations (CMO).

.

These asset backed securities can be further re-securitized to form CDO² (CDO Squares), which in turn can be further re-re-securitized to form CDO³ (CDO Cubes), and so on. This is a complicated process and will be discussed in a separate post.

.
.

What is a Collateralized Loan Obligation (CLO) ?

Posted by Mohit Sewak Category: Finance, Securitization

.
.
.

What is a Collateralized Loan Obligation (CLO) ?

.
.
.

Going by the dictionary meanings, Collateralized Loan Obligations or a CLO, should have meant any loan taken against any collateral (anything to back up a loan, for eg. an asset as a mortgage).

But in structured finance (a sector of finance that was created to help transfer risk using complex legal and corporate entities), we take this definition a step forward to call any security formed/ derived (these come under financial derivatives) as a result of securitization of such underlying mortgage backed loans/ debts/ fixed-income assets as CLO’s.
.

Therefore the technical definition of CLOs would be:

Collateralized Loan Obligations (CLOs) are a form of securitization where payments from multiple middle sized and large business loans are pooled together and passed on to different classes of owners in various tranches.

.

Some other names by which these securities are called are (There can be minute or no differences among such terms which we will be discussing later, but broadly speaking they all mean the same thing):

.

1. Asset Backed Securities (ABS), or

2. Asset Backed Obligations, or

3. Mortgage Backed Securities (MBS), or

4. Mortgage Backed Obligations, or

5. Collateralized Debt Obligations (CDO), or

6. Collateralized Debt Securities (CDS), or

7. Collateralized Mortgage Obligations (CMO).

.

These asset backed securities can be further re-securitized to form CDO² (CDO Squares), which in turn can be further re-re-securitized to form CDO³ (CDO Cubes), and so on. This is a complicated process and will be discussed in a separate post.

.
.

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TERIM Model of Securitization

How is Securitization Done ?

Transfer

Enhance

Rate

Issue

Manage

Other Posts Related to Securitization:

What is a Bankruptcy Remote Entity (BRE) ?

Example 1: – High Risk/ High Leverage Project Financing

Example 2: – Securitization of Risky Loans/ Mortgage Instruments.

Other Posts Related to Securitization:

What is a Special Purpose Company (SPC) ?

Example 1: – High Risk/ High Leverage Project Financing

Example 2: – Securitization of Risky Loans/ Mortgage Instruments.

Other Posts Related to Securitization:

What is a Special Purpose Entity (SPE) ?

Example 1: – High Risk/ High Leverage Project Financing

Example 2: – Securitization of Risky Loans/ Mortgage Instruments.

Other Posts Related to Securitization:

What is a Special Purpose Vehicle (SPV) ?

Example 1: – High Risk/ High Leverage Project Financing

Example 2: – Securitization of Risky Loans/ Mortgage Instruments.

Other Posts Related to Securitization:

What is Securitization?

Reasons for and advantages of Securitization:

Other Posts Related to Securitization:

What is a Collateralized Debt Security (CDS) ?

Other Posts Related to Securitization:

What is an Asset Backed Obligation (ABO) ?

Other Posts Related to Securitization:

What is a Collateralized Loan Obligation (CLO) ?

Other Posts Related to Securitization: