It is the process of packaging financial instruments into a new fungible ones. One common advantage of this process is the enhancement of liquidity relative to the underlying collateral or financial instrument. Another benefit is the movement towards standardisation of unit specifications.
This is a method by which entities can raise capital. It involves them converting some of their assets into securities rather than selling them, for example, a Bank could convert its loans into Mortgage Bonds and sell them as such.
Turning a future cashflow into tradable, bond like securities.