SECURITIZATION
Purpose: Applications for corporate, bank and finance company use of techniques of securitization to lower costs of credit and enhance returns.
Suggested Participants: Treasury staff, marketing officers, operations staff
9:00 – 10:30 ² Introduction to Securitization
Definition and role in the market
Structure: the picture of a securitized transaction
Originators, trusts and their roles
Assets suitable for packaging
Pay–through vs. pass–through
Credit–loss coverage: the quality of collateral
Basic economics
10:30 – 10:45 Break
10:45 – 12:30 ² Commercial Bank Use of Securitization
Credit and liquidity risk
Credit cards, auto loans, etc. as securities
Economics and balance sheet effects
Calculation of yields
² Corporate Use of Securitization
Packaging receivables, lease payments
Benefits
maximization of return on assets
lowering cost of capital
balance sheet management
Legal issues
12:30 – 1:30 Lunch
1:30 – 3:30 ² U.S. Housing Market Securities: the largest market
Home loan mortgage origination
Creation of securities: GMNA, FNMA, FHLMC, etc.
Effect on originators, securities markets
Comparisons to U.S. Treasuries
Pricing and spreads: calculation of yields
3:30 – 3:45 Break
3:45 – 5:00 ² Mini–Case: Securitize Corporate Balance Sheet