imported>Doug Williamson |
imported>Doug Williamson |
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| ''Assets - tradable securities''.
| | A claim which enjoys a ranking ahead of others in a liquidation. |
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| To convert non-tradable assets into tradable securities.
| | Senior claims, therefore, carry a relatively lower degree of [[credit risk]]. |
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| For example turning non-tradable assets, like residential mortgage loans, into tradable assets (such as mortgage-backed securities).
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| This is often undertaken through a securitisation special purpose vehicle.
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| The credit risk of the assets is divided into tranches, and payments to the investors are dependent on the performance of the assets.
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| When a special purpose vehicle is used, the assets are transferred to the special purpose vehicle, which then issues securities.
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| Non-performance of underlying assets is a key risk for investors, and was one of the triggers for the Global Financial Crisis (GFC).
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| :<span style="color:#4B0082">'''''Originators & Sponsors in securitisation'''''</span>
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| :"For the purposes of the Securitisation Regulation, the Originator of an asset is either a party that was directly or indirectly involved in the original creation of the asset, or acquired the asset for its own account and then securitised it.
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| :... the Sponsor of a securitisation is a party that sets up the securitisation and manages it, but does not securitise its own assets."
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| :''Originator - Sponsor - the Treasurer's Wiki.''
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| == See also == | | == See also == |
| * [[Collateral]] | | * [[Junior]] |
| * [[Collateralise]] | | * [[Senior debt]] |
| * [[Covered bond]] | | * [[Tranche]] |
| *[[Global Financial Crisis]] (GFC)
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| * [[Loan]]
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| * [[Mortgage]]
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| * [[Mortgage-backed securities]] (MBS)
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| * [[Originator]]
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| * [[Secured]]
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| * [[Securitisation ]]
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| * [[Securitisation Regulation]]
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| * [[Securitisation special purpose vehicle]]
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| * [[Securitisation swap]]
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| * [[Security]]
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| * [[Significant Risk Transfer]]
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| * [[Sponsor]]
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| * [[Sukuk]]
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| * [[Whole business securitisation]]
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| | [[Category:Corporate_finance]] |
| [[Category:Long_term_funding]] | | [[Category:Long_term_funding]] |
| | [[Category:Compliance_and_audit]] |
| | [[Category:Manage_risks]] |
| | [[Category:Treasury_operations_infrastructure]] |
