Securitisation

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A debt structure that allows issuers to accelerate cashflow on an underlying asset. Typically, a company will securitise its future trade receivables and an investor will sell loan receivables (CDOs for example). Requires a special purpose vehicle (SPV) to be established, the receivables converted into a security and sold to third-party investors. Credit and liquidity support many be required.

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Back to basics: What Is Securitization?