In what way can asset securitization reduce the cost of funds for an issuer?
Could you please explain in details? Also, can you provide some example?© BrainMass Inc. brainmass.com October 16, 2018, 7:54 pm ad1c9bdddf
Securitization is the process of transforming illiquid assets into a security, i.e. an instrument that is issued and can be traded in a capital market. Assets that have been transformed in this manner include residential mortgages, auto loans, credit card receivables, leases and utility payments. Securities involving housing mortgages are referred to as mortgage-backed securities (MBS). The term asset-backed security (ABS) is generally applied to any securitized instrument other than MBS. Asset securitization techniques were pioneered in the U.S.A and are being embraced by a number of Asian countries seeking to promote home ownership, finance infrastructure growth, and develop their domestic capital markets.
In case of a typical Asset Securitization financial claims ...
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Asset Securitization: What does it provide to markets
Asset Securitization is a major factor in financial markets. What does Asset Securitization provide to markets? What kinds of assets get securitized?
Do you think computerization and globalization have an impact upon;
1. The types of assets that get securitized?
2. The amount of assets (both value and number) that get securitized? and
3. the breadth of the market?