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What is securitisation?

Securitisation is a financial operation, involving the “conversion” of non-liquid assets (banks' claims, trade receivables and future receivables) in liquid securities (bonds).

 

Securitisation using the securitisation fund

A main entity involved in the securitisation process is the securitisation fund that buys a debt portfolio from the originator (e.g. a bank). A securitisation funds pays for the debt portfolio purchases with the funds raised from investors in the bond issue. Such bonds can be secured with other debt portfolios that have been purchased by the fund at some earlier date.