Securitisation

Question 1

What are the benefits of securitization for the originator?

Answer 1

Increased liquidity, risk transfer, lower cost of capital, capital relief, funding source diversification.

Question 2

key factors of securitisation?

Answer 2

-guarantee mechanisms reduce investor risk
-deal structure, more risk = more return
-liquidity important to buy + sell ABS in security market
-law + regulation changes impact security value performance
- transparency is essential to assess risk
-stable CF’s = sign on good asset performance, effective pricing and valuation