Securitization is the process of converting illiquid assets or a group of assets and transform these assets into a tradable and bankable security applying financial engineering provided by top financial experts.
A fully fledged Security is a bankable, negotiable financial instrument based on monetary value. A Security usually represents an ownership stake in a publicly-traded corporation, a creditor relationship with a governmental body or a corporation, or rights to ownership as represented by an option.
Your security can be structured on the basis of one, or a pool of similar assets with predictable cash flows, or can be based on future revenue claims, liquid and illiquid assets, debt or equity based, tangible, or intangible assets, located anywhere in the free world and for which a market value can be established.
Emit a Security and generate acceptable bankable Collateral
The most common way to fund a project or raise capital is through a bank. You can get a bank loan if your professional capabilities as a business man, or a business woman are acceptable to the bank and you can collateralize your loan request.
You can create acceptable collateral by converting your investment offering or loan request into a Security which serves as collateral for a bank loan, or offers a private placement investment opportunity for investors.
Get funded though Qualified Investors
Most Securities transactions take place in the secondary market in which sophisticated “Qualified Investors” buy or sell securities through Privately Placements.
“Qualified Investors” are Banks, Institutional Investors, Insurance Companies, Family Offices and Hedge Funds. They have their clearly defined and regulated investment strategies and often are limited to invest in structured products emitted as a fully fledged Security.
Securitization is packaging of loans or receivables in a pool using mechanisms of credit enhancements and the subsequent sale of the packed assets to investors. Investors buy repacked assets in the form of securities or a loan that are backed by this pool of assets. Thus, the securitization transforms illiquid assets into liquid
Securitisation in Russia, 2005
Securitization is financing or refinancing of any assets of the company that generate revenues – for example, claims that arise in the ordinary course of business, by means of “conversion” of such assets in the tradable, liquid form through issue of bonds or other securities. In doing so, the company (originator) transfers a pool of its assets to a specially established entity, which in turn issues debt securities backed by the transferred assets
Securitization is a financial transaction in which assets are collected in a single pool, and then securities that reflect the interest payments in the pool are issued
Securitization is backed lending, in which the company gets a loan backed by assets or group of assets
Davidson et al., 2003
Securitization is a process of formation of the pools of financial obligations and their shaping that allows financial assets to freely circulate among many investors. Thus, securitization allows to turn the original obligations in the purchase object.
Comptroller’s Handbook on Asset Securitization, 2016
Asset Securitization is the structured process whereby interests in loans and other receivables are packaged, underwritten, and sold in the form of “asset-backed” securities
Black’s Law Dictionary, 9th ed. Garner, 2009
Securitization is a process of averaging and packaging of financial instruments in the new instruments that can be sold