What is securitization of assets
The narrow term securitization of assets (assert security) refers to the process whereby an enterprise or financial institution combines its assets that generate cash proceeds and sells them to a special purpose carrier (spv) and then to a securities product supported by a cash flow from the underlying asset after the creation of the special purpose carrier。
In practice, loan agreements or receivables, generally provided by banks, credit card companies or other credit providers, are the underlying assets and carry the collateral function, bonds or securities issued. It is more inclusive and is now widely available in credit card loans, student loans, automobile loans, enterprise rental loans, tourism loans, mortgages, etc., with mortgages known as “mbs”. The main providers are commercial banks and issuers. Most of the rest are classified as abs。
In essence, securitization of assets is the packaging of cash flows from underlying assets into easy-to-sale securities, which will immediately realize predictable future cash flows. Therefore, predictable cash flows are a prerequisite for securitization。
Broadly defined asset securitization not only includes traditional asset securitization, but also extends the base asset to equity assets such as specific income and business operating assets, and may even be further consolidated with credit derivatives。
Basic classification of asset securitization products
In more mature european and american markets for asset securitization, traditional securitized assets include bank-claimed assets such as housing mortgages, commercial real estate mortgages, credit card loans, car loans, business loans, etc., as well as corporate claims assets such as equipment leasing. These traditional securitization products are generally referred to as abs (asset-backed securitys), but in the united states they are usually referred to as mbs (mortgage-backed securitys) based on real estate mortgages, while the rest are referred to as abs。
