p
p


p

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ñ ³Securitization is nothing but liquifying assets

comprising loans and receivables of an
institution through systematic issuance of
financial instruments.´

ñ ³It is a carefully structured process whereby

loans and other receivables are packaged,
underwritten and sold in the form of Asset
Backed Securities.´
O
Ñ  p  p
p
ñ abligor
ñ ariginator
ñ Special Purpose Vehicle (SPV)
ñ Credit Rating Agency
ñ Underwriter
ñ Investors
ñ Agent and Trustee
ñ Enhancer/Insurer/Guarantor

º
  
p Ñ 


ñ IDENTIFICATIaN STAGE
ñ TRANSFER STAGE
ñ ISSUE STAGE
ñ REDEMPTIaN STAGE
ñ CREDIT RATING STAGE

‰
 p   

·
   p
ñ Pass through and pay through Certificates
ñ Preferred Stock Certificates
ñ Asset Based Commercial Papers

a
 
ñ Interest anly certificates
ñ Principal anly certificates

Î
p 
ñ Term Loans
ñ Commercial Loans
ñ Receivables From Government
ñ Vehicle Loans
ñ Lease Finance
ñ Mortgage Loans
ñ Credit Cards Receivables


  p

ñ Additional Source af Fund (For ariginator)

ñ Greater Profitability
ñ Spreading af Risk
ñ Higher Rate af Return
ñ Prevention af Idle Capital
ñ Provision of Multiple Instruments

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ñ Assets need to be selected carefully.
ñ Credit ratings
ñ SPV and originator should be separate
parties.
ñ The instruments arising out of securitisation
must be listed in stock exchanges.
ñ Standardized loan documents.
ñ Proper guidelines.

A
 Ñ  
† Costly Source
† Uneconomical for lower requirements
† Passes on data-base to Investors

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ñ New Concept
ñ Heavy stamp duty and registration fees
ñ Cumbersome Transfer Procedures
ñ Difficulty in assignment of debts
ñ Absence of standardised loan documentation
ñ Inadequate credit rating facilities
ñ Absence of proper guidelines

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