Securitisation

This overview is a guide to the Banking & Finance content within the Securitisation subtopic, with links to appropriate materials.

Introduction to securitisation

Securitisation is a technique used to finance the ownership or sale of types of assets that would otherwise be difficult to finance/sell (ie 'illiquid' assets such as bilateral loans and mortgage and other loans to natural persons). In its most common and basic form securitisation is a financing technique that consists in the sale of large pools of such cash-generating assets to a special purpose vehicle (SPV). The SPV pays for the assets by issuing interest-bearing securities (also known as 'bonds' or 'notes') into the capital markets which have the benefit of security over those assets and/or the cashflows generated by them (known as 'receivables'). The cashflows are used to pay interest and repay principal on the securities, and investors can generally only look to the receivables for repayment. For an introduction to securitisation including the different types of securitisation, typical underlying assets, key parties and transaction documents, see Practice Note: Introductory guide to securitisation.

For a summary of the key stages in the securitisation process,

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