Friday, October 17, 2008

Securitization

Securitization is a structured finance process, which involves pooling and repackaging of cash flow producing financial assets into securities that are then sold to investors. The name "securitization" is derived from the fact that the form of financial instruments used to obtain funds from the investors are securities.

Securitization is the process of taking an illiquid asset, or group of assets, and through financial engineering, transforming them into a security.

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