Upload
corporate-bridge-academy
View
448
Download
0
Embed Size (px)
DESCRIPTION
For full text article go to : http://www.educorporatebridge.com/securitization/securitization-of-assets This Article explain concepts like securitization of asset, meaning of securitization in layman language, ABS,MBS,CDO,CMO etc.
Citation preview
What is Securitization?
Securitization is the process conversion of receivables and cash flow generated from a
collection or pool of financial assets like mortgage loans, auto loans, credit card
receivables etc into the marketable securities. ”
“
Asset securitization is the process whereby interests in loans and receivables are packaged
and sold in the form of ABS asset backed securities.
Asset Securitization
“ ”
Parties involved in securitization
Typical Securitization Structure
Must Know Concepts in securitization
Asset back securities (ABS)
Collateralized debt obligation
Mortgage-backed securities (MBS)
Collateralized Mortgage Obligations
Asset back securities (ABS)
Asset-backed securities are the bonds or notes backed by some financial assets. These assets consist of receivables such as mortgage loans,
credit card receivables, auto loans, manufactured-housing contracts and home-
equity loans.
Collateralized debt obligation
It is an investment grade security backed by a pool of various other securities.
Mortgage-backed securities (MBS)
Mortgage-backed securities are bonds that are backed by pools of mortgage loans. Examples Mortgage papers, house papers,
land and Property papers.
Collateralized Mortgage Obligations (CMO)
The CMO is a multiclass bond backed by a pool of mortgage pass-through or mortgage loans.
Difference between MBS and ABS
No. MBS ABS
1 The Duration for
trading is more than 15
years.
The Duration for
trading is up to 5 years.
2 Securities: Mortgage
papers, house papers,
land and Property
papers.
Securities: Credit card
papers, Share
certificates, Auto or
vehicle papers.
Be a part of edu CBA Family!!!
https://www.facebook.com/CorporateBridgeGroup
https://www.educorporatebridge.com/
https://www.educorporatebridge.com/free-courses/
https://twitter.com/corporatebridge
Thank
You!!!
If you have found this Presentation
to be useful, kindly
Like
Share
Follow!!! +