What is Securitisation?
Securitisation is a financial process where an IOU is drawn up for investors by a securitisation vehicle. The proceeds from this are then used to obtain assets, future cash flows or risk, while cash flows are generated by the securitisation vehicle from the investment proceeds. The investors are then paid incomes and/or interests from the underlying assets generated by those which have been securitised. Almost all forms of assets can be securitised. From loans, bonds, shares, to real estate, movable property, and even intellectual property rights, Coprolin is here to help you make the most from what you have.
The Objective and Benefits of Securitisation
The objective of securitisation is to achieve real remoteness between the original owner of an asset – the Originator – and the asset acquired by the securitisation vehicle. Through securitisation, the assets will become detached from the Originator’s balance sheet, both legally and accounting wise.
The key benefit of securitisation is that it can provide non-traditional sources of capital market financing, thus complementing traditional investments through equity and debt. It may also be a solution for when applicable investment guidelines, which need to be followed by investment funds, restrict the investment in certain asset classes, such as private equity, lending or illiquid assets.
Through securitisation undertakings, day-to-day administrative responsibilities can also be delegated to any third party, including the Originator.
The implementation of a securitisation transaction requires careful planning. If you want to learn more about the benefits – as well as the procedure – of setting up a securitisation structure, please get in touch. We’d love to assist you with any queries.