SECURITIZATION

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SUMMARY

This modules enables participants to define the process of securitization and how it is contributing to disintermediation of commercial lending institutions. Asset packaging and selling the balance sheet are the focus of this module.

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OBJECTIVES

Upon completion of this module, participants will be able to:

1. Define securitization.

2. Describe the structure of securitized transactions.

3. Use NPV to calculate the cash proceeds of a securitized transaction.

4. Compare and contrast the pay–through and pass–through structures of securitized transactions.

5. List the criteria of asset packaging.

6. Identify the benefits of securitization.

7. Identify the levels of risk and the risk–holders or securitized assets.

8. Describe how securitization contributes to disintermediation.

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