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Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations (or other non-debt assets which generate receivables) and selling their related cash flows to third party investors as securities, which may be described as bonds, pass-through securities, or collateralized debt ...
ABS backed by credit card receivables are issued out of trusts that have evolved over time from discrete trusts to various types of master trusts of which the most common is the de-linked master trust. Discrete trusts consist of a fixed or static pool of receivables that are tranched into senior/subordinated bonds. A master trust has the ...
Single-seller programs involve a conduit that issues commercial paper backed by assets from only one originator, which frequently also sponsors the conduit. The majority of single-seller conduits mainly fund credit-card receivables, mortgages, mortgage-backed securities, or auto loans. Such programs tended not to have explicit liquidity support ...
Advantages of securitization ... a U.S. recession, and the U.S. trade deficit kept interest rates low globally from 2000 to 2004–5, ...
The primary timing issue involves what are known as accounts receivables—the delay between selling something to a customer and receiving payment for it. [5] A non-asset-based line of credit will have a credit limit set on account opening by the accounts receivables size, to ensure that it is used for the correct purpose.
[4] [5] Forfaiting is a factoring arrangement used in international trade finance by exporters who wish to sell their receivables to a forfaiter. [6] Factoring is commonly referred to as accounts receivable factoring, invoice factoring, and sometimes accounts receivable financing.
Through securitization and structured finance, more families, individuals, and businesses have access to essential credit, seamlessly and at a lower price. [1] With more than 370 member institutions, the Structured Finance Association (SFA) is the leading trade association for the structured finance industry.
The bank, or someone like a bank owned them, and they always exercised their best judgement and their interest. The problem now with the size of securitization and so many loans are not in the hands of a portfolio lender but in a security where structurally nobody is acting as the fiduciary.
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related to: trade receivables securitization