company issued securities used for financing and backed by selected financial assets
The process of distributing risk by repackaging loans and selling certificates, or securities. This entitles the owner to some or all of the repayments on the loans.
financial transaction in which a loan or other assets are bundled and transformed into marketable securities (individual mortgages are pooled and securities backed by the same are then issued).
A process whereby loans or other receivables are packaged, underwritten and sold to investors. In some instances, the assets sold are first transferred to an unconsolidated SPE (Special Purpose Entity). These entities are structured to be bankruptcy remote in order to isolate the credit risk of the assets from the overall credit risk of the selling entity. Outside investors, usually institutions, typically purchase a debt instrument issued by the SPE. Whether or not credit risk associated with the securitized assets is retained by the seller depends on the structure of the securitization. See "Monetization."
The process of converting mortgages in to mortgage-backed securities.
The process of pooling certain assets, of a company or a financial institution, which have regular repayment schedules, e.g., housing mortgages, credit card loans, etc., and using them as collateral for the issue of the asset-backed securities to be distributed to investors
Securitization is the process of selling non-conventional loan packages to investors (public or private) who represent an interest in the cash flow generated by asset-backed loans. Loans are sold to a trustee (for cash), who in turn sells the loan (in bond form) to investors.
a financial transaction in which assets are pooled and securities representing interests in the pool are issued
Securitizing assets involves selling financial assets to trusts or special purpose vehicles that are independent from the Bank; it serves as an effective balance sheet management tool by reducing or eliminating the need to hold capital against risk-weighted assets, enabling capital to be reduced or redeployed to alternative revenue-generating purposes, and serves as an effective liquidity management tool by diversifying funding sources.
The process of converting loans, leases or other financial commitments into bonds, or other debt market instruments. A simple example would be a portfolio of residential mortgages used to create mortgage pass-through securities.
Structured municipal bonds securities state and local debt by pooling infrastructure loans, by structuring principal and interest payments into different classes of securities aimed at different groups of investors, and/or by cred* enhancing senior bondholders. Grant-backed credit enhancement (GBCE) uses the authorized flow of federal and state formula grants to credit enhance state and local loans and bonds, particularly structured municipal bonds. Unlike federal guarantees or letters of credit, GBCE should not jeopardize the municipal bond tax exemption.
Debt issuance backed by mortgage portfolio.
The process of packaging assets in such a way that they can be marketed as securities back by the assets.
The process of pooling loans into securities backed by mortgage loans. This is one process used to provide capital for the creation of mortgage loans.
The process by which financial assets, mainly loans, are transferred to a trust, which normally issues a series of asset-backed securities to investors to fund the purchase of loans.
Creating a more or less standard investment instrument such as the mortgage pass-through security, by pooling assets to back the instrument. Also refers to the replacement of nonmarketable loans and/or cash flows provided by financial intermediaries with negotiable securities issued in the public capital markets.
A process whereby loans or other receivables are packaged, underwritten and sold to investors. In a typical transaction, assets are sold to a special purpose entity (SPE), which purchases the assets with cash raised through issuance of beneficial interests (usually debt instruments) to third party investors. Whether or not credit risk associated with the securitized assets is retained by the seller depends on the structure of the securitization. See “Monetization†and “Variable Interest Entity.
Source of financing whereby an entity's assets (typically mortgage loans, lease obligations or other types of receivables ) are placed in a special purpose vehicle that issues securities collateralized by such assets.
The process of converting an illiquid asset, such as a mortgage loan, into a tradable form, such as mortgage-backed securities
The bundling and resale of debt instruments to investors; permitted only for parties licensed and regulated by the SEC.
A process under which non-marketable assets, such as mortgages, automobile leases and credit card receivables, are converted into marketable securities that can be traded among investors.
the process of creating a financial instrument by combining other financial assets and then marketing them to investors
The replacement of conventional ways of raising finance (e.g. loans) by instruments like Euronotes; the process whereby untradable assets become tradable.
The development of markets for a variety of debt instruments that permit the ultimate borrower to bypass the banks and other deposit-taking institutions and to borrow directly from lenders. In a narrow sense it also refers to the process of converting loans of various sorts into marketable securities by packaging the loans into pools and then selling shares of ownership in the pool itself.
The process of creating a passthrough, such as the mortgage pass-through security, by which the pooled assets become standard securities backed by those assets.
The pooling of mortgage loans into a mortgage-backed security. The principal and interest payments from the individual mortgages are paid out to the holders of the MBS security.
The process of selling lease receivables to a separate legal entity that issues stocks and bonds to investors. The investors' proceeds flow through to the company that sold the receivables and the investors receive their returns from collecting lessee receivables.
The pooling of real estate mortgages and trust deeds to act as collateral for the sale of securities to public and private investors. (See secondary mortgage market)
Packaging of assets to allow the issuance of securities conveying an ownership interest in the assets and their cash flows.
A process by which a loan, originally made by a bank or other financial intermediary, is converted into a security to increase its liquidity as a financial instrument and to reduce the financial intermediary’s capital requirements. Basically, it is the origination, aggregation and distribution of commercial mortgage bonds.
The process of aggregating similar financial instruments, such as loans or mortgages, into one or more negotiable securities. Certain securitization transactions result in a complete transfer of risk to investors, and in others, the company typically retains risk in the form of senior or subordinated notes or residual interests in the securities issued (any of which we refer to as retained interests).
The process of pooling assets and selling interests in the pool to investors.
Securitization is the process of financing a pool of similar but unrelated financial assets (usually loans or other debt instruments) by issuing to investors security interests representing claims against the cash flow and other economic benefits generated by the pool of assets.
The process of pooling a group of assets, such as loans or mortgages, and selling securities backed by these assets. Securitization is one way microfinance institutions can access capital markets, improve liquidity and lend more money, all while managing risk.
The act of acquiring loans and issuing a collateralized security that closely resembles a bond. This activity was pioneered in the mortgage-backed security market by the Federal National Mortgage Association and other quasi-official government agencies.
The act of pledging assets to a creditor through a note, lien or bond.
(1) The securing of a loan or another debt instrument by the pledge of assets. (2) The phenomenon whereby corporate borrowers find it cheaper to raise money by issuing negotiable securities on the Capital market, rather than borrowing from the bank. Français: Sécuritization Español: Securitization
The process of pooling loans into mortgage-backed securities for sale into the secondary mortgage market.
The process whereby loans are pooled.
The process of gathering group of debt obligations such as mortgages into a pool, and then dividing that pool into portions that can be sold as securities in the secondary market.
Process of the borrower giving the lender security to obtain the loan.
A process by which corporations pool various types of assets (credit cards, car payments, mortgages) into a single-purpose trust, then debt is issued against the trust with the funds passed back to the corporation. Debtholders' security is the pooled assets; they have little or no claim against the seller.
The creation of security interests in an asset.
A term used to describe the process of raising funds through the sale of securities. It usually creates a new financial instrument representing an undivided interest in a segregated pool of assets such as commercial mortgage loans. The ownership of the assets is usually transferred to a legal trust or special purpose, bankruptcy remote corporation to protect the interests of the security holders.
The creation of a new investment instrument by combining other financial assets. This new investment is then marketed to investors. For example: bundling of a number of mortgages into a new investment, then selling the new investment to investors as a "mortgage backed investment".
Securitization is a financing technique that allows the corporation to separate credit origination and funding activities. The technique comes under the umbrella of structured finance as it applies to assets that typically are illiquid contracts (i.e. assets that cannot easily be sold). It has evolved from tentative beginnings in the late 1970s to a vital funding source with an estimated total aggregate outstanding of $8.06 trillion (as of the end of 2005, by the Bond Market Association) and new issuance of $3.07 trillion in 2005 in the U.S. markets alone.