securitized


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Related to securitized: Securitized Mortgage

Securitization

The process by which a company packages its illiquid assets as a security. For example, when a company makes an initial public offering, it effectively packages the company's ownership into a certain number of stock certificates. Securities are backed by an asset, such as equity, or debt, such as a portion of a mortgage. Securitization allows a company access to greater funding to expand its operations or investments, or some other reason.

securitized

Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds.
Case Study Tobacco companies agreed in the late 1990s to provide states with billions of dollars in cash payments over many years. The huge monetary settlements came in response to lawsuits filed by the states for health-related expenses resulting from their citizens' tobacco use. Unwilling to wait for all the promised money, politicians in several states proposed issuing debt securities backed by the promised revenue streams. Promised cash flows from the settlement would be securitized with bonds sold to investors. Florida governor Jeb Bush proposed that his state sell half its $17.4 billion settlement to be received over many years for approximately $2.4 billion. Some financial analysts worried potential lawsuits could force tobacco companies into bankruptcy, in which case promised payment from the settlements would be at risk. Securitizing the settlement payments would transfer the risk from the states to investors who purchased the bonds. Buying the bonds that were backed by promised tobacco company payments would allow individual investors to participate in the settlements.
References in periodicals archive ?
Recently we have gained a good deal of momentum with our Strategic Fixed Income and Securitized Assets Strategies, as clients have increasingly sought creative investment solutions within the fixed income space.
Barclays Plc (LSE: BARC) has announced that it has named a head for US securitized product trading.
That's why it's taken a while for securitized lenders to make construction loans--normally they fund money up front because they want to sell the bonds based on certain loan amounts.
Starting in 1996, American Skandia securitized several tranches of mortality and expense charges and surrender charges on its variable annuity business.
For example, a securitized issue of $100 million might have five tranches -- two investment grade and three non-investment grade.
Securitized Multiple Asset Rated Trust, series 1997-5;
Now, companies with virtually any type of receivable can be sold off a firm's balance sheet and securitized.
Both sales and purchases of securitized pools offer improved diversification and a greater selection of risk and return alternatives.
AMRESCO is also an experienced primary and special servicer of securitized loans.
After we selected Fannie and Freddie representatives, Fannie, Freddie and various securitized and portfolio lenders actively competed for the right to provide the permanent financing.
Securitization of mortgages changed the typical savings and loan from an integrated institution which originated, held and serviced mortgages to maturity--with all the attendant risks--to one in which a large part of the mortgage originations are immediately passed on to an investment bank or government agency, where they are securitized.