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Ian H. Giddy
Professor of Finance
New York University
Asset-Backed Securities
Asset-backed securities constitute a growing segment of the US, European and global capital markets. In recent years the ABS market has enabled companies and banks to finance a wide range of assets in the public debt market and has attracted a variety of fixed-income investors. The asset securitization techniques, while complex, has won a secure place in corporate financing and investment portfolios because it can, paradoxically, offer originators a cheaper source of funding and investors a superior return. Not only does securitization transform illiquid assets into tradeable securities, but it also manages to transform risk by means of the separation of good financial assets from a company or financial institution with little loss of revenue. The assets, once separated from the originator, are employed as backing for high-quality securities designed to appeal to investors.
- This website offers articles, case studies, Internet links and downloadable
resources on the securitization technique.
What is Asset Securitization?
Asset-backed securities are securities which are based on pools of underlying assets. These assets are usually illiquid and private in nature. A securitization occurs to make these assets available for investment to a much broader range of investors. The "pooling" of assets makes the securitization large enough to be economical and to diversify the qualities of the underlying assets. A special purpose trust or instrument is set up which takes title to the assets and the cash flows are "passed through" to the investors in the form of an asset-backed security. The types of assets that can be "securitized" range from residential mortgages to trade receivables and even music royalties. The asset-backed security usually qualifies for a top rating and enables the issuing company or bank to raise funds at a very attractive rate, while freeing up capital and retaining customer relatiuonships and servicing revenues.Recent Seminars on Securitization
- New Developments in Asset-Backed Securities (Excellante International, Johannesburg)
- Financial Institution Risk Management: The Impact of Securitization (Sogang University, Korea)
- Financing with Asset-Backed Securities (Institute of Bankers, Kuala Lumpur)
- Techniques in the Asset-Backed Securities Market (DBS Bank, Singapore)
- Asset-Backed Securities: The Global Challenge (CFS, Frankfurt)
- When The Rating Agencies Get it Wrong (HypoVereinsbank, UK)
- ABS: The Hidden Risks (Ambac, New York)
- Asset-Backed Securities Workshop (HypoVereinsbank, Munich)
- Asset-Backed Securities (University of Torino)
- Asset-Backed Securities (Frontiers of Finance Series, New York University)