Securitisation
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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.
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Securitization
Securitization is the process of taking illiquid assets like mortgages, student loans, or auto loans and transforming them into tradable securities. This is done by pooling many assets and issuing securities backed by those assets, making the assets more liquid. For example, a mortgage-backed security bundles many mortgages together and issues securities of varying risk levels. This provides liquidity to the original illiquid assets and allows various investors to invest based on their risk tolerance. Securitization has been used in India since the early 1990s, with the largest deals involving pools of auto loans or aircraft receivables.
Securitisation
The document is a report on financial services that discusses securitization. It contains:
1) An introduction to securitization, the process of pooling and selling existing assets to a Special Purpose Vehicle which then issues asset-backed securities.
2) Details on the entities involved in securitization - originator, special purpose vehicle, obligor, servicer, trustee, rating agency, and structurer.
3) The regulatory framework and history of securitization deals in India, including some of the largest deals.
Securitization
This document provides an overview of securitization, including:
- Securitization is the process of converting illiquid assets into liquid assets by pooling them and selling securities backed by the pooled assets.
- The key participants are originators, special purpose vehicles, investors, and servicers. Assets like mortgages, credit cards, auto loans can be securitized.
- Benefits include off-balance sheet financing for originators and returns for investors. Risks include collateral, structural, legal, and third party risks.
- India has taken steps to regulate securitization but lacks a comprehensive framework and standardization.
Securitization of assets
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.
Factoring
Factoring is a financial transaction where a business sells its accounts receivable to a third party at a discount in exchange for immediate cash. There are various types of factoring, including recourse factoring, where the client refunds amounts for defaults, and non-recourse factoring, where the factor's obligation is absolute. Factoring provides businesses with immediate cash flow and transfers the credit risk to the factoring institution. However, it is a relatively expensive source of financing.
Financial services
The document discusses various types of financial services including traditional activities like leasing, hire purchase, bills discounting, and venture capital as well as modern activities like risk management services and capital restructuring advisory. It also covers the objectives, characteristics, and importance of financial services and how they contribute to economic growth and capital formation.
Factoring services
Factoring is a financial transaction where a business sells its accounts receivable to a third party called a factor in exchange for immediate cash. This differs from a bank loan in that factoring emphasizes the receivable's value rather than the firm's creditworthiness, it is a purchase of assets rather than a loan, and involves three parties rather than two. The three parties are the seller of the receivable, the debtor, and the factor. Factoring transfers ownership of the receivables to the factor, giving them the right to collect payment from debtors and bear the risk of nonpayment.
Securitization in india
Securitization is the process of packaging loans and other receivables into marketable securities that can be sold to investors. It allows originators like banks to transfer assets off their balance sheets in exchange for upfront cash, while still earning fees from servicing the assets. The presentation discusses the securitization process in India, benefits for originators, requirements for success, and challenges facing the Indian securitization market like stamp duties and legal issues. While securitization is growing in India, challenges around legislation and standardization remain.
Recommended
Securitization
Securitization is the process of taking illiquid assets like mortgages, student loans, or auto loans and transforming them into tradable securities. This is done by pooling many assets and issuing securities backed by those assets, making the assets more liquid. For example, a mortgage-backed security bundles many mortgages together and issues securities of varying risk levels. This provides liquidity to the original illiquid assets and allows various investors to invest based on their risk tolerance. Securitization has been used in India since the early 1990s, with the largest deals involving pools of auto loans or aircraft receivables.
Securitisation
The document is a report on financial services that discusses securitization. It contains:
1) An introduction to securitization, the process of pooling and selling existing assets to a Special Purpose Vehicle which then issues asset-backed securities.
2) Details on the entities involved in securitization - originator, special purpose vehicle, obligor, servicer, trustee, rating agency, and structurer.
3) The regulatory framework and history of securitization deals in India, including some of the largest deals.
Securitization
This document provides an overview of securitization, including:
- Securitization is the process of converting illiquid assets into liquid assets by pooling them and selling securities backed by the pooled assets.
- The key participants are originators, special purpose vehicles, investors, and servicers. Assets like mortgages, credit cards, auto loans can be securitized.
- Benefits include off-balance sheet financing for originators and returns for investors. Risks include collateral, structural, legal, and third party risks.
- India has taken steps to regulate securitization but lacks a comprehensive framework and standardization.
Securitization of assets
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.
Factoring
Factoring is a financial transaction where a business sells its accounts receivable to a third party at a discount in exchange for immediate cash. There are various types of factoring, including recourse factoring, where the client refunds amounts for defaults, and non-recourse factoring, where the factor's obligation is absolute. Factoring provides businesses with immediate cash flow and transfers the credit risk to the factoring institution. However, it is a relatively expensive source of financing.
Financial services
The document discusses various types of financial services including traditional activities like leasing, hire purchase, bills discounting, and venture capital as well as modern activities like risk management services and capital restructuring advisory. It also covers the objectives, characteristics, and importance of financial services and how they contribute to economic growth and capital formation.
Factoring services
Factoring is a financial transaction where a business sells its accounts receivable to a third party called a factor in exchange for immediate cash. This differs from a bank loan in that factoring emphasizes the receivable's value rather than the firm's creditworthiness, it is a purchase of assets rather than a loan, and involves three parties rather than two. The three parties are the seller of the receivable, the debtor, and the factor. Factoring transfers ownership of the receivables to the factor, giving them the right to collect payment from debtors and bear the risk of nonpayment.
Securitization in india
Securitization is the process of packaging loans and other receivables into marketable securities that can be sold to investors. It allows originators like banks to transfer assets off their balance sheets in exchange for upfront cash, while still earning fees from servicing the assets. The presentation discusses the securitization process in India, benefits for originators, requirements for success, and challenges facing the Indian securitization market like stamp duties and legal issues. While securitization is growing in India, challenges around legislation and standardization remain.
Credit Rating
The document provides information on credit ratings. It begins by defining credit and explaining what a credit rating is. A credit rating evaluates a debtor's ability to repay debt and the likelihood of default. It is determined by credit rating agencies based on both public and private information. The document then discusses the different types of ratings including sovereign, short term, and corporate credit ratings. It provides details on the rating scales and categories used by major agencies. The benefits of credit ratings for both investors and companies are outlined. Finally, it discusses some leading credit rating agencies globally and domestically in India.
Chapter 38- Purpose Of Insurance
This document discusses the purpose of insurance. It begins by defining insurance as a way to spread losses among a large number of people who contribute to a common fund. Insurance transfers risk from the insured to one or more insurers. It provides financial protection and compensation in the event of a claim. The importance of pooling risk is that it allows risks to be spread evenly among a large number of contributors, making it easier for insurance companies to bear losses than individuals. Insurance companies make profits based on the difference between premiums and investment income collected, and losses from claims paid out plus administrative costs.
Merchant Banking ppt
Merchant banking provides capital to companies through equity investment rather than loans. It offers advisory services on corporate matters and investment banking services like mergers and acquisitions. Merchant banking started in Italy and France in the 17th-18th centuries and modern merchant banking began in London by financing foreign trade through bill acceptance. In India, merchant banking was introduced by Grindlays Bank in 1967 and other Indian and foreign banks subsequently established merchant banking divisions. Merchant banks invest their own capital and provide services primarily to large corporations and high-net-worth individuals rather than retail banking.
Loan syndication
The document is a student's project on loan syndication. It includes a declaration by the student that the information submitted is true and original. It also includes a certificate from the student's project guide. The acknowledgements section thanks various individuals who provided guidance and support. The index lists the contents of the project, which covers topics such as the meaning of loan syndication, the syndication process, reasons for syndicated lending, and the role of parties involved. It also includes an overview of ICICI Bank and its syndication services.
Mutual funds_Financial Services
- The document provides an overview of mutual funds including their concept, workings, history, structure, types, and regulations in India.
- Mutual funds pool money from investors and invest it professionally in securities like stocks and bonds. They provide investors diversification, professional management, and low costs.
- The mutual fund industry in India has grown significantly since the 1990s and is now regulated by SEBI. Key entities involved include sponsors, trustees, asset management companies, and custodians.
- Mutual funds can be categorized by structure (open-ended or closed-ended), investment objective (growth, income, balanced), or type (equity, debt, liquid/money market funds). Regulations govern
Securitization
Securitization is the process of combining various financial assets, such as mortgages, car loans, and credit card debt, into securities that are sold to investors. This is done through a special purpose vehicle (SPV) that purchases the assets from their originator and repackages them into new securities backed by those assets. Mortgage-backed securities are a common example, where mortgages are pooled, divided into tiers of risk, and sold as securities. SPVs play an important role by isolating risk, allowing assets to be securitized without affecting the originator, and providing bankruptcy protection for investors.
Debt market
The debt market allows governments and companies to raise capital by issuing bonds and debt securities. The debt market is segmented into the primary market, where new bonds are issued, and the secondary market, where existing bonds are traded. Debt markets play an important role in efficiently allocating resources in the economy and financing government development activities. Common debt instruments include loans, debentures, bonds, mortgages, and treasury bills. Participants in the debt market include issuers, investors, managers, agents and trustees, and trading infrastructure providers. While debt financing provides tax advantages and retains business control for issuers, it also requires meeting fixed payments and carries risks if collateral is provided or cash flow declines.
Underwriting
The document discusses underwriting, which is an agreement where underwriters take on the risk of purchasing securities from an issuer in the event that the public demand is insufficient. It describes different types of underwriting arrangements and the roles and responsibilities of underwriters. It also outlines the eligibility criteria, registration process, operational guidelines, and record keeping requirements for underwriters according to SEBI regulations in India. As an example, it summarizes that Alibaba's 2014 IPO raised over $20 billion with six major banks serving as equal lead underwriters.
Bond management strategies
A bond is a debt security where the issuer owes the holder a debt and is obliged to repay the principal and interest at maturity. Bonds have features like nominal value, coupon rate, maturity date, and call/put options. There are various types of bonds like fixed rate, floating rate, zero coupon bonds, and municipal bonds. Bond portfolio strategies include passive buy and hold strategies, active strategies like sector substitution, and semi-active strategies like immunization and duration matching to reduce interest rate risk. Bonds are evaluated based on the issuer's financial strength and past earnings, while valuation considers the present value of future cash flows and yield to maturity is the single discount rate that equals the current price.
Securitization of debt
This document provides an overview of securitization of debt. It defines securitization as the conversion of future cash flows from financial assets like loans into tradable securities that can be sold in the market. This process allows lenders to raise funds. A special purpose vehicle (SPV) is used as an intermediary between the originator of assets and investors. The SPV issues different types of securities backed by assets like mortgages (MBS), consumer debt (ABS), and corporate debt (CDO). The document discusses the key features and types of securitizable assets in securitization.
Certificate of deposit (cd)
Certificates of deposit (CDs) are short-term deposit instruments issued by banks and financial institutions to raise large amounts of money. CDs can be issued with maturities ranging from 7 days to 12 months by banks and 1 to 3 years by financial institutions. They must be purchased in amounts of at least Rs. 1 lakh. Banks and corporations use CDs to mobilize funds when needed, such as providing loans. CDs provide liquidity to banks while offering depositors higher returns than regular fixed deposits. However, the CD market in India has yet to be fully developed due to the lack of a secondary market and low usage despite being available for some time.
Mutual fund
A mutual fund is a professionally managed investment scheme that pools money from many investors to purchase stocks, bonds and other securities. It allows individual investors to diversify their holdings and benefit from professional fund management at a low cost. The money collected is invested in different securities and the income and capital appreciation is shared by unit holders proportionate to their investment. Mutual funds provide an opportunity for common investors to invest in a basket of securities with a relatively small amount of money.
Modes of Charging Security
,
modes of charging
,
modes of charging security
,
different modes of creating charge
,
essentials of pledge
,
documents required for pledge
,
liquid asset
,
different forms of liquid assets
,
supplies of liquid assets
,
demand of assets
Cash credit
This document discusses cash credit, which is a financing facility provided by banks to fund working capital needs. It defines cash credit and explains how banks determine cash credit limits based on factors like production, sales, inventory and past utilization. Banks typically sanction limits equal to 60-70% of current stock and 60-70% of debtors up to 180 days. Interest is charged monthly on the actual amount utilized. Cash credit functions like a current account with an overdraft limit. Stocks and debtors are usually hypothecated to the bank as security. Commitment charges may also be levied on unutilized portions of the limit.
General insurance
Fire insurance protects people from financial losses caused by fires. It involves sharing fire-related losses incurred by some through contributions to a common fund by all who are exposed to fire risk. Fire insurance pays for losses that are unexpected and occur due to chance. It aims to restore the insured's financial position prior to the loss through the principle of indemnity.
Commercial papers
Commercial paper (CP) is an unsecured, short-term debt instrument issued by corporations to meet short-term liabilities. CP was introduced in India in 1990 to provide highly rated corporations an alternative to bank borrowing. Only reputable corporations with good credit ratings can issue CPs to borrow at lower interest rates than banks and save on financing costs. CPs can be issued for periods between 15 days to one year, making them suitable for meeting working capital or current asset needs.
Investment alternatives
This document defines and describes various types of security and non-security marketable and non-marketable financial assets. It discusses equity shares, preference shares, bonds, debentures, convertible securities, hybrid securities, derivatives, and various money market instruments. It also covers non-security assets such as fixed deposits, gilt-edged securities, and post office savings schemes.
Investment Banking in India
An investment banking is a financial institution that assists individuals, corporations and governments in raising financial capital by underwriting or acting as the client’s agent in the issuance of securities or both
Introduction and history of insurance in India
Insurance Law: Introduction and History
Rahul Chhoker, Research Scholar, Kurukshetra University, Kurukshetra
Securitization.ppt
This document provides an overview of securitization, including:
- Securitization involves pooling and repackaging illiquid financial assets like loans into marketable securities that can be sold to investors. This provides liquidity to originators and spreads risk.
- The process involves an originator transferring assets to a special purpose vehicle (SPV) that issues securities to investors. Cash flows from the underlying assets are used to make payments to investors.
- Credit ratings and other credit enhancements make the securities more attractive to investors. Securitization provides benefits like capital relief and cheaper funding to originators.
securtization & mortgage loans by moula
The document discusses securitization and mortgage loans. Securitization is the process of converting assets like mortgage loans into marketable securities that can be sold to investors. It allows banks to raise funds by pooling and repackaging their loans. The key aspects covered are the definition of securitization, the players involved like originators and SPVs, the securitization process, and some benefits like improving capital adequacy and providing an alternative funding source for banks. Examples of major mortgage companies in India and securitization companies are also provided.
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The document provides information on credit ratings. It begins by defining credit and explaining what a credit rating is. A credit rating evaluates a debtor's ability to repay debt and the likelihood of default. It is determined by credit rating agencies based on both public and private information. The document then discusses the different types of ratings including sovereign, short term, and corporate credit ratings. It provides details on the rating scales and categories used by major agencies. The benefits of credit ratings for both investors and companies are outlined. Finally, it discusses some leading credit rating agencies globally and domestically in India.
Chapter 38- Purpose Of Insurance
This document discusses the purpose of insurance. It begins by defining insurance as a way to spread losses among a large number of people who contribute to a common fund. Insurance transfers risk from the insured to one or more insurers. It provides financial protection and compensation in the event of a claim. The importance of pooling risk is that it allows risks to be spread evenly among a large number of contributors, making it easier for insurance companies to bear losses than individuals. Insurance companies make profits based on the difference between premiums and investment income collected, and losses from claims paid out plus administrative costs.
Merchant Banking ppt
Merchant banking provides capital to companies through equity investment rather than loans. It offers advisory services on corporate matters and investment banking services like mergers and acquisitions. Merchant banking started in Italy and France in the 17th-18th centuries and modern merchant banking began in London by financing foreign trade through bill acceptance. In India, merchant banking was introduced by Grindlays Bank in 1967 and other Indian and foreign banks subsequently established merchant banking divisions. Merchant banks invest their own capital and provide services primarily to large corporations and high-net-worth individuals rather than retail banking.
Loan syndication
The document is a student's project on loan syndication. It includes a declaration by the student that the information submitted is true and original. It also includes a certificate from the student's project guide. The acknowledgements section thanks various individuals who provided guidance and support. The index lists the contents of the project, which covers topics such as the meaning of loan syndication, the syndication process, reasons for syndicated lending, and the role of parties involved. It also includes an overview of ICICI Bank and its syndication services.
Mutual funds_Financial Services
- The document provides an overview of mutual funds including their concept, workings, history, structure, types, and regulations in India.
- Mutual funds pool money from investors and invest it professionally in securities like stocks and bonds. They provide investors diversification, professional management, and low costs.
- The mutual fund industry in India has grown significantly since the 1990s and is now regulated by SEBI. Key entities involved include sponsors, trustees, asset management companies, and custodians.
- Mutual funds can be categorized by structure (open-ended or closed-ended), investment objective (growth, income, balanced), or type (equity, debt, liquid/money market funds). Regulations govern
Securitization
Securitization is the process of combining various financial assets, such as mortgages, car loans, and credit card debt, into securities that are sold to investors. This is done through a special purpose vehicle (SPV) that purchases the assets from their originator and repackages them into new securities backed by those assets. Mortgage-backed securities are a common example, where mortgages are pooled, divided into tiers of risk, and sold as securities. SPVs play an important role by isolating risk, allowing assets to be securitized without affecting the originator, and providing bankruptcy protection for investors.
Debt market
The debt market allows governments and companies to raise capital by issuing bonds and debt securities. The debt market is segmented into the primary market, where new bonds are issued, and the secondary market, where existing bonds are traded. Debt markets play an important role in efficiently allocating resources in the economy and financing government development activities. Common debt instruments include loans, debentures, bonds, mortgages, and treasury bills. Participants in the debt market include issuers, investors, managers, agents and trustees, and trading infrastructure providers. While debt financing provides tax advantages and retains business control for issuers, it also requires meeting fixed payments and carries risks if collateral is provided or cash flow declines.
Underwriting
The document discusses underwriting, which is an agreement where underwriters take on the risk of purchasing securities from an issuer in the event that the public demand is insufficient. It describes different types of underwriting arrangements and the roles and responsibilities of underwriters. It also outlines the eligibility criteria, registration process, operational guidelines, and record keeping requirements for underwriters according to SEBI regulations in India. As an example, it summarizes that Alibaba's 2014 IPO raised over $20 billion with six major banks serving as equal lead underwriters.
Bond management strategies
A bond is a debt security where the issuer owes the holder a debt and is obliged to repay the principal and interest at maturity. Bonds have features like nominal value, coupon rate, maturity date, and call/put options. There are various types of bonds like fixed rate, floating rate, zero coupon bonds, and municipal bonds. Bond portfolio strategies include passive buy and hold strategies, active strategies like sector substitution, and semi-active strategies like immunization and duration matching to reduce interest rate risk. Bonds are evaluated based on the issuer's financial strength and past earnings, while valuation considers the present value of future cash flows and yield to maturity is the single discount rate that equals the current price.
Securitization of debt
This document provides an overview of securitization of debt. It defines securitization as the conversion of future cash flows from financial assets like loans into tradable securities that can be sold in the market. This process allows lenders to raise funds. A special purpose vehicle (SPV) is used as an intermediary between the originator of assets and investors. The SPV issues different types of securities backed by assets like mortgages (MBS), consumer debt (ABS), and corporate debt (CDO). The document discusses the key features and types of securitizable assets in securitization.
Certificate of deposit (cd)
Certificates of deposit (CDs) are short-term deposit instruments issued by banks and financial institutions to raise large amounts of money. CDs can be issued with maturities ranging from 7 days to 12 months by banks and 1 to 3 years by financial institutions. They must be purchased in amounts of at least Rs. 1 lakh. Banks and corporations use CDs to mobilize funds when needed, such as providing loans. CDs provide liquidity to banks while offering depositors higher returns than regular fixed deposits. However, the CD market in India has yet to be fully developed due to the lack of a secondary market and low usage despite being available for some time.
Mutual fund
A mutual fund is a professionally managed investment scheme that pools money from many investors to purchase stocks, bonds and other securities. It allows individual investors to diversify their holdings and benefit from professional fund management at a low cost. The money collected is invested in different securities and the income and capital appreciation is shared by unit holders proportionate to their investment. Mutual funds provide an opportunity for common investors to invest in a basket of securities with a relatively small amount of money.
Modes of Charging Security
,
modes of charging
,
modes of charging security
,
different modes of creating charge
,
essentials of pledge
,
documents required for pledge
,
liquid asset
,
different forms of liquid assets
,
supplies of liquid assets
,
demand of assets
Cash credit
This document discusses cash credit, which is a financing facility provided by banks to fund working capital needs. It defines cash credit and explains how banks determine cash credit limits based on factors like production, sales, inventory and past utilization. Banks typically sanction limits equal to 60-70% of current stock and 60-70% of debtors up to 180 days. Interest is charged monthly on the actual amount utilized. Cash credit functions like a current account with an overdraft limit. Stocks and debtors are usually hypothecated to the bank as security. Commitment charges may also be levied on unutilized portions of the limit.
General insurance
Fire insurance protects people from financial losses caused by fires. It involves sharing fire-related losses incurred by some through contributions to a common fund by all who are exposed to fire risk. Fire insurance pays for losses that are unexpected and occur due to chance. It aims to restore the insured's financial position prior to the loss through the principle of indemnity.
Commercial papers
Commercial paper (CP) is an unsecured, short-term debt instrument issued by corporations to meet short-term liabilities. CP was introduced in India in 1990 to provide highly rated corporations an alternative to bank borrowing. Only reputable corporations with good credit ratings can issue CPs to borrow at lower interest rates than banks and save on financing costs. CPs can be issued for periods between 15 days to one year, making them suitable for meeting working capital or current asset needs.
Investment alternatives
This document defines and describes various types of security and non-security marketable and non-marketable financial assets. It discusses equity shares, preference shares, bonds, debentures, convertible securities, hybrid securities, derivatives, and various money market instruments. It also covers non-security assets such as fixed deposits, gilt-edged securities, and post office savings schemes.
Investment Banking in India
An investment banking is a financial institution that assists individuals, corporations and governments in raising financial capital by underwriting or acting as the client’s agent in the issuance of securities or both
Introduction and history of insurance in India
Insurance Law: Introduction and History
Rahul Chhoker, Research Scholar, Kurukshetra University, Kurukshetra
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Similar to Securitisation
Securitization.ppt
This document provides an overview of securitization, including:
- Securitization involves pooling and repackaging illiquid financial assets like loans into marketable securities that can be sold to investors. This provides liquidity to originators and spreads risk.
- The process involves an originator transferring assets to a special purpose vehicle (SPV) that issues securities to investors. Cash flows from the underlying assets are used to make payments to investors.
- Credit ratings and other credit enhancements make the securities more attractive to investors. Securitization provides benefits like capital relief and cheaper funding to originators.
securtization & mortgage loans by moula
The document discusses securitization and mortgage loans. Securitization is the process of converting assets like mortgage loans into marketable securities that can be sold to investors. It allows banks to raise funds by pooling and repackaging their loans. The key aspects covered are the definition of securitization, the players involved like originators and SPVs, the securitization process, and some benefits like improving capital adequacy and providing an alternative funding source for banks. Examples of major mortgage companies in India and securitization companies are also provided.
securtization & mortgage loans
The document discusses securitization and mortgage loans. Securitization is the process of converting assets like mortgage loans into marketable securities that can be sold to investors. It allows banks to raise funds by pooling and repackaging their loans. The key aspects covered are the definition of securitization, the players involved like originators and SPVs, the securitization process, and some benefits like improving capital adequacy and providing an alternative funding source for banks. Examples of major mortgage companies in India and securitization companies are also provided.
63ab1securitization(New)
Securitization is a process where long-term financial assets like loans are pooled together and converted into marketable securities that can be sold to investors. This provides the originator with cash while transferring the credit risk to the investors. The document discusses the parties and stages involved including identification of assets, transfer to a special purpose vehicle, issuing securities to investors, and redemption upon repayment or default of underlying assets. Guidelines are provided on selecting high quality assets and ensuring proper structures, risk ratings, and regulations are in place for a successful securitization program.
Securitisatio
Securitization is the process of pooling and repackaging illiquid financial assets like receivables, loans, or leases into marketable securities that can be sold to investors. The assets are originated by a company and sold to a special purpose vehicle (SPV) that issues securities to fund the purchase. The SPV contracts the originator to administer the assets, using cash flows to repay investors while passing surpluses back to the originator. Credit enhancement through mechanisms like over-collateralization or insurance protects investors against losses on the underlying assets. Key parties include originators, SPVs, investors, obligors, rating agencies, administrators, and structurers. Common securitization instruments are pass-through certificates,
Securitization
The document discusses securitization, which involves converting illiquid loans and receivables into marketable securities. Securitization originated in Denmark by selling bonds backed by equal amounts of loans. It later evolved in the US through innovations like slicing loan portfolios into tradable securities. A key part of securitization is the use of a special purpose vehicle (SPV) that purchases the loans, issues securities to investors, and uses the loan payments to repay investors. This separates the loans from the originator, protecting investors. Securitization provides originators with liquidity and long-term funding while transferring risk off their balance sheets.
Asset securitization
Securitization is the process of converting future cash flows from assets into marketable securities that can be sold to investors. An originator transfers a pool of financial assets like loans or receivables to a special purpose vehicle (SPV). The SPV issues securities called pass-through certificates or pay-through certificates to investors to fund the purchase. Investors receive periodic payments from the cash flows generated by the underlying assets. This allows the originator to raise funds and transfer assets off its balance sheet.
Securitization
The document discusses securitization, which involves a corporation transferring assets like mortgages or receivables to a special purpose vehicle (SPV) that issues securities backed by those assets. The key aspects of securitization include bankruptcy remoteness of the assets, credit enhancement to obtain high credit ratings, and structuring cash flows and securities to meet investor needs.
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The document then discusses various types of financial services such as banking services, investment services, insurance, and examples of each. It also covers the importance of financial services for economic growth, promotion of savings and investments, and risk minimization. Finally, it distinguishes between fund-based financial services that involve raising and investing funds, and fee-based services involving specialized activities like stock broking, credit ratings, and asset securitization.
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The document discusses securitization of debt, the process involved, and credit ratings. It defines securitization as removing financial institution assets from its balance sheet and funding them through marketable securities purchased by investors. The process involves an originator, special purpose vehicle, merchant banker, credit rating agency, and investors. Assets are identified, transferred to the SPV, and split into marketable securities. Credit ratings assess the ability of companies/instruments to repay debt and are regulated in India. Ratings consider factors like industry risk, profitability, and management.
Securitisation in india
Securitization involves pooling financial assets like loans and converting them into marketable securities. This allows the originator to access funding and improve liquidity. In India, securitization grew out of similar developments in the US housing market in the 1970s. It involves an originator transferring assets to a special purpose vehicle which then issues bonds backed by the assets' cash flows. This benefits originators through lower funding costs, improved liquidity and balance sheet management.
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With the passage of Finance Bill 2013 on April 30 in Lok Sabha proposing to Levy a 30% distribution tax on the investors in securitization deals through special purpose vehicles, there is a stir in the securitization market. The principal investors (banks) were paying the tax on their net income from the securitization transaction through SPVs. Now, they will be taxed on the gross income as per the new Finance Bill. The new securitization guidelines issued in May 2012 dipped the volume of fresh issue to Rs. 28,400 crore from Rs. 44,500 crore in the preceding fiscal.
Securitization
Securitization involves pooling various types of assets and converting ownership rights into marketable securities that can be sold to investors. This process allows banks and originators to move assets off their balance sheets, freeing up capital. It benefits all parties by allowing originators to access new funding sources, investors to gain exposure to new assets, and special purpose vehicles to facilitate the transaction and isolate risk.
Financial services
Financial services refer to services provided by the finance industry, such as banking, insurance, investment funds, and more. There are two main types of financial services - fund or asset based services, which involve raising and investing funds, and fee based services, where companies earn income through fees. Fund based services include leasing, housing finance, credit cards, venture capital, factoring, forfeiting, and bill discounting. Fee based services involve activities like issue management, corporate advisory, credit ratings, mutual funds, and stock broking.
financialservices-130430050753-phpapp02.pdf
Financial services refer to services provided by the finance industry, such as banks, credit card companies, insurance companies, brokerages, and investment funds. There are two main types of financial services - fund or asset-based services, and fee-based services. Fund-based services involve raising funds through deposits, debt, or equity and investing those funds by lending or purchasing securities. These include services like leasing, housing finance, credit cards, venture capital, factoring, forfeiting, and bill discounting. Fee-based services involve earning income through fees, commissions, or brokerage on services like issue management, advisory, credit ratings, mutual funds, securitization, and stock broking.
Financial services
Financial services refer to services provided by the finance industry, such as banks, credit card companies, insurance companies, brokerages, and investment funds. There are two main types of financial services - fund or asset-based services, and fee-based services. Fund-based services involve raising funds through deposits, debt, or equity and investing those funds by lending or purchasing securities. These include services like leasing, housing finance, credit cards, venture capital, factoring, forfeiting, and bill discounting. Fee-based services involve earning income through fees, commissions, or brokerage on services like issue management, advisory, credit ratings, mutual funds, securitization, and stock broking.
Modes of Issuing Sukuk
Sukuk can be issued through various securitization structures. Securitization involves pooling assets and repackaging them into marketable securities known as sukuk. A special purpose vehicle (SPV) is typically used to hold the assets and issue the sukuk. The sukuk represent undivided ownership interests in the underlying assets, with profits distributed from the assets' revenue. Common asset-based sukuk include those backed by murabahah contracts, ijarah contracts through asset sale-leaseback, and receivables. The SPV provides bankruptcy protection for investors if the originator entity encounters financial problems.
Financial services ppt 1
The document discusses various types of financial services. It begins by defining financial services as services provided by the finance industry, including banks, credit card companies, insurance companies, brokerages, and government enterprises. It then describes several types of fundamental financial services like leasing, underwriting, consumer credit, hire purchase, factoring, forfaiting, bill discounting, housing finance, and venture capital financing. The document also distinguishes between fund-based services, which involve raising and investing funds, and fee-based services, which generate income through fees from services like issue management, advisory, credit ratings, mutual funds, and stock broking. It provides details on selected services like stock broking, credit ratings, and CR
Financing Project Through Structured Finance
This is an all about the overview of the topic "Financing Project Through Structured Finance" with a proper explanation related to Project Finance and Structured Finance.
Securitization
Securitization involves pooling financial assets like loans and converting them into marketable securities. Key players include originators who make the original loans, special purpose entities that purchase the loans and issue securities, credit rating agencies that rate the securities, underwriters that help issue the securities, trustees that ensure obligations are fulfilled, servicers that collect loan payments, and investors who purchase the securities. SPVs play an intermediary role by holding the pooled securities and allowing risk sharing. Banks securitize to diversify risk, generate liquid assets, extend their credit pool, and earn fee income, while investors can earn higher returns through a diversified portfolio. However, prepayments and floating rates may impact returns, and maintenance obligations and regulator concerns about under
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Securitisation
- 1. SecuritizationSecuritization Made by. khaja moinuddin
- 2. Meaning …Meaning … 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.
- 4. Definition:Definition: Securitization is the process of pooling and repackaging of homogeneous illiquid financial assets into marketable securities that can be sold to investors.
- 5. Securitization AssetsSecuritization Assets 1.Mortgage-Backed Securities 2.Asset-Backed Securities Mortgage-Backed Securities 1.Residential Mortgage Loans 2.Commercial Mortgage Loans
- 6. Securitization AssetsSecuritization Assets Asset-Backed Securities 1.Credit card Receivables 2.Auto Loan Receivables 3.Personal Loan Receivables 4.Lease Receivables
- 7. Participants in the SecuritizationParticipants in the Securitization ProcessProcess The Originator The servicer or Administrator The Special Purpose Vehicle (SPV) The Investors The Obligor The Rating Agency Credit Enhancer Arranger or Structure Trustee
- 8. Credit Enhancement:Credit Enhancement: Credit Enhancement refers to the various means that attempt to buffer the investors against losses on the assets collateralising their investment. Often required to secure high credit rating and for low cost of funding.
- 9. Types of Credit Enhancement:Types of Credit Enhancement: External Credit Enhancement: ◦ Insurance ◦ Third Party Guarantee ◦ Letter of Credit
- 10. Contd..Contd.. Internal Credit Enhancement: ◦ Credit Trenching ◦ Over- Collaterisation ◦ Cash Collateral ◦ Spread Account
- 11. Mechanism of SecuritizationMechanism of Securitization Pass-Through Certificates: • In a PTC, the SPV issues PTCs which are essentially participation certificates that enable the investors to take a direct exposure on the performance of the securitized assets. These certificates imply that the investors hold a proportional beneficial interest in the assets held by the SPV.
- 12. Continued…Continued… Pay-Through structure: • A pay through structure gives only a charge against the cash flows arising from the securitized assets while the ownership of the assets lies with the SPV. • In a pay-through arrangement, cash flows of the underlying assets and the services of the securitized papers are delinked. • The SPV issues a secured debt instrument to the investors as a securitized paper.
- 13. Purposes of SecuritizationPurposes of Securitization To improve the return on capital To raise finance when other forms of finance are unavailable To improve return on assets To diversify the source funding which can be accessed
- 14. Features of securitizationFeatures of securitization Marketability Merchantable quality Wide distribution Commoditization