A company can issue bonds to investors that are secured on the expected future profits from its current life part of the business.
When a pool of financial assets (such as car finance, home or commercial mortgages, corporate loans, royalties, leases, non-performing receivables, and contractual operating revenues) is created and called a ‘special purpose vehicle or entity’ ‘ (SPV) is transferred. or SPE) is known as a securitization transaction.
Generally, most securitization transactions involve a two-tier transaction in which the originator of the assets transfers such assets to a wholly owned SPV. Markets covered by such assets. This second-tier entity may be another SPV or a conduit for multi-seller commercial paper and may provide funding by issuing medium-term notes or commercial paper.
Types of securitization transactions