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class="vector-toc-list"> <li id="toc-Pooling_and_transfer" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Pooling_and_transfer"> <div class="vector-toc-text"> <span class="vector-toc-numb">1.1</span> <span>Pooling and transfer</span> </div> </a> <ul id="toc-Pooling_and_transfer-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Issuance" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Issuance"> <div class="vector-toc-text"> <span class="vector-toc-numb">1.2</span> <span>Issuance</span> </div> </a> <ul id="toc-Issuance-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Credit_enhancement_and_tranching" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Credit_enhancement_and_tranching"> <div class="vector-toc-text"> <span class="vector-toc-numb">1.3</span> <span>Credit enhancement and tranching</span> </div> </a> <ul id="toc-Credit_enhancement_and_tranching-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Servicing" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Servicing"> <div class="vector-toc-text"> <span class="vector-toc-numb">1.4</span> <span>Servicing</span> </div> </a> <ul id="toc-Servicing-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Repayment_structures" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Repayment_structures"> <div class="vector-toc-text"> <span class="vector-toc-numb">1.5</span> <span>Repayment structures</span> </div> </a> <ul id="toc-Repayment_structures-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Structural_risks_and_misincentives" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Structural_risks_and_misincentives"> <div class="vector-toc-text"> <span class="vector-toc-numb">1.6</span> <span>Structural risks and misincentives</span> </div> </a> <ul id="toc-Structural_risks_and_misincentives-sublist" class="vector-toc-list"> </ul> </li> </ul> </li> <li id="toc-Special_types_of_securitization" class="vector-toc-list-item vector-toc-level-1 vector-toc-list-item-expanded"> <a class="vector-toc-link" href="#Special_types_of_securitization"> <div class="vector-toc-text"> <span class="vector-toc-numb">2</span> <span>Special types of securitization</span> </div> </a> <button aria-controls="toc-Special_types_of_securitization-sublist" class="cdx-button cdx-button--weight-quiet cdx-button--icon-only vector-toc-toggle"> <span class="vector-icon mw-ui-icon-wikimedia-expand"></span> <span>Toggle Special types of securitization subsection</span> </button> <ul id="toc-Special_types_of_securitization-sublist" class="vector-toc-list"> <li id="toc-Master_trust" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Master_trust"> <div class="vector-toc-text"> <span class="vector-toc-numb">2.1</span> <span>Master trust</span> </div> </a> <ul id="toc-Master_trust-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Issuance_trust" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Issuance_trust"> <div class="vector-toc-text"> <span class="vector-toc-numb">2.2</span> <span>Issuance trust</span> </div> </a> <ul id="toc-Issuance_trust-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Grantor_trust" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Grantor_trust"> <div class="vector-toc-text"> <span class="vector-toc-numb">2.3</span> <span>Grantor trust</span> </div> </a> <ul id="toc-Grantor_trust-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Owner_trust" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Owner_trust"> <div class="vector-toc-text"> <span class="vector-toc-numb">2.4</span> <span>Owner trust</span> </div> </a> <ul id="toc-Owner_trust-sublist" class="vector-toc-list"> </ul> </li> </ul> </li> <li id="toc-Motives_for_securitization" class="vector-toc-list-item vector-toc-level-1 vector-toc-list-item-expanded"> <a class="vector-toc-link" href="#Motives_for_securitization"> <div class="vector-toc-text"> <span class="vector-toc-numb">3</span> <span>Motives for securitization</span> </div> </a> <button aria-controls="toc-Motives_for_securitization-sublist" class="cdx-button cdx-button--weight-quiet cdx-button--icon-only vector-toc-toggle"> <span class="vector-icon mw-ui-icon-wikimedia-expand"></span> <span>Toggle Motives for securitization subsection</span> </button> <ul id="toc-Motives_for_securitization-sublist" class="vector-toc-list"> <li id="toc-Advantages_to_issuer" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Advantages_to_issuer"> <div class="vector-toc-text"> <span class="vector-toc-numb">3.1</span> <span>Advantages to issuer</span> </div> </a> <ul id="toc-Advantages_to_issuer-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Disadvantages_to_issuer" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Disadvantages_to_issuer"> <div class="vector-toc-text"> <span class="vector-toc-numb">3.2</span> <span>Disadvantages to issuer</span> </div> </a> <ul id="toc-Disadvantages_to_issuer-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Advantages_to_investors" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Advantages_to_investors"> <div class="vector-toc-text"> <span class="vector-toc-numb">3.3</span> <span>Advantages to investors</span> </div> </a> <ul id="toc-Advantages_to_investors-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Risks_to_investors" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Risks_to_investors"> <div class="vector-toc-text"> <span class="vector-toc-numb">3.4</span> <span>Risks to investors</span> </div> </a> <ul id="toc-Risks_to_investors-sublist" class="vector-toc-list"> </ul> </li> </ul> </li> <li id="toc-History" class="vector-toc-list-item vector-toc-level-1 vector-toc-list-item-expanded"> <a class="vector-toc-link" href="#History"> <div class="vector-toc-text"> <span class="vector-toc-numb">4</span> <span>History</span> </div> </a> <button aria-controls="toc-History-sublist" class="cdx-button cdx-button--weight-quiet cdx-button--icon-only vector-toc-toggle"> <span class="vector-icon mw-ui-icon-wikimedia-expand"></span> <span>Toggle History subsection</span> </button> <ul id="toc-History-sublist" class="vector-toc-list"> <li id="toc-Green_securitization_in_the_EU" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Green_securitization_in_the_EU"> <div class="vector-toc-text"> <span class="vector-toc-numb">4.1</span> <span>Green securitization in the EU</span> </div> </a> <ul id="toc-Green_securitization_in_the_EU-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Recent_lawsuits" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Recent_lawsuits"> <div class="vector-toc-text"> <span class="vector-toc-numb">4.2</span> <span>Recent lawsuits</span> </div> </a> <ul id="toc-Recent_lawsuits-sublist" class="vector-toc-list"> </ul> </li> </ul> </li> <li id="toc-See_also" class="vector-toc-list-item vector-toc-level-1 vector-toc-list-item-expanded"> <a class="vector-toc-link" href="#See_also"> <div class="vector-toc-text"> <span class="vector-toc-numb">5</span> <span>See also</span> </div> </a> <ul id="toc-See_also-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-References" class="vector-toc-list-item vector-toc-level-1 vector-toc-list-item-expanded"> <a class="vector-toc-link" href="#References"> <div class="vector-toc-text"> <span class="vector-toc-numb">6</span> <span>References</span> </div> </a> <ul id="toc-References-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-External_links" class="vector-toc-list-item vector-toc-level-1 vector-toc-list-item-expanded"> <a class="vector-toc-link" href="#External_links"> <div class="vector-toc-text"> <span class="vector-toc-numb">7</span> <span>External links</span> </div> </a> <ul id="toc-External_links-sublist" class="vector-toc-list"> </ul> </li> </ul> </div> </div> </nav> </div> </div> <div class="mw-content-container"> <main id="content" class="mw-body"> <header class="mw-body-header vector-page-titlebar"> <nav aria-label="Contents" class="vector-toc-landmark"> <div id="vector-page-titlebar-toc" class="vector-dropdown vector-page-titlebar-toc vector-button-flush-left" title="Table of Contents" > <input type="checkbox" id="vector-page-titlebar-toc-checkbox" role="button" aria-haspopup="true" data-event-name="ui.dropdown-vector-page-titlebar-toc" class="vector-dropdown-checkbox " aria-label="Toggle the table of contents" > <label id="vector-page-titlebar-toc-label" for="vector-page-titlebar-toc-checkbox" class="vector-dropdown-label cdx-button cdx-button--fake-button cdx-button--fake-button--enabled cdx-button--weight-quiet cdx-button--icon-only " aria-hidden="true" ><span class="vector-icon mw-ui-icon-listBullet mw-ui-icon-wikimedia-listBullet"></span> <span class="vector-dropdown-label-text">Toggle the table of contents</span> </label> <div class="vector-dropdown-content"> <div id="vector-page-titlebar-toc-unpinned-container" class="vector-unpinned-container"> </div> </div> </div> </nav> <h1 id="firstHeading" class="firstHeading mw-first-heading"><span class="mw-page-title-main">Securitization</span></h1> <div id="p-lang-btn" class="vector-dropdown mw-portlet mw-portlet-lang" > <input type="checkbox" id="p-lang-btn-checkbox" role="button" aria-haspopup="true" data-event-name="ui.dropdown-p-lang-btn" class="vector-dropdown-checkbox mw-interlanguage-selector" aria-label="Go to an article in another language. Available in 30 languages" > <label id="p-lang-btn-label" for="p-lang-btn-checkbox" class="vector-dropdown-label cdx-button cdx-button--fake-button cdx-button--fake-button--enabled cdx-button--weight-quiet cdx-button--action-progressive mw-portlet-lang-heading-30" aria-hidden="true" ><span class="vector-icon mw-ui-icon-language-progressive mw-ui-icon-wikimedia-language-progressive"></span> <span class="vector-dropdown-label-text">30 languages</span> </label> <div class="vector-dropdown-content"> <div class="vector-menu-content"> <ul class="vector-menu-content-list"> <li class="interlanguage-link interwiki-ar mw-list-item"><a href="https://ar.wikipedia.org/wiki/%D8%AA%D9%88%D8%B1%D9%8A%D9%82" title="توريق – Arabic" lang="ar" hreflang="ar" data-title="توريق" data-language-autonym="العربية" data-language-local-name="Arabic" class="interlanguage-link-target"><span>العربية</span></a></li><li class="interlanguage-link interwiki-az mw-list-item"><a href="https://az.wikipedia.org/wiki/Sekuritizasiya" title="Sekuritizasiya – Azerbaijani" lang="az" hreflang="az" data-title="Sekuritizasiya" data-language-autonym="Azərbaycanca" data-language-local-name="Azerbaijani" class="interlanguage-link-target"><span>Azərbaycanca</span></a></li><li class="interlanguage-link interwiki-bg mw-list-item"><a href="https://bg.wikipedia.org/wiki/%D0%A1%D0%B5%D0%BA%D1%8E%D1%80%D0%B8%D1%82%D0%B8%D0%B7%D0%B0%D1%86%D0%B8%D1%8F" title="Секюритизация – Bulgarian" lang="bg" hreflang="bg" data-title="Секюритизация" data-language-autonym="Български" data-language-local-name="Bulgarian" class="interlanguage-link-target"><span>Български</span></a></li><li class="interlanguage-link interwiki-ca mw-list-item"><a href="https://ca.wikipedia.org/wiki/Titulitzaci%C3%B3" title="Titulització – Catalan" lang="ca" hreflang="ca" data-title="Titulització" data-language-autonym="Català" data-language-local-name="Catalan" class="interlanguage-link-target"><span>Català</span></a></li><li class="interlanguage-link interwiki-cs mw-list-item"><a href="https://cs.wikipedia.org/wiki/Sekuritizace" title="Sekuritizace – Czech" lang="cs" hreflang="cs" data-title="Sekuritizace" data-language-autonym="Čeština" data-language-local-name="Czech" class="interlanguage-link-target"><span>Čeština</span></a></li><li class="interlanguage-link interwiki-de mw-list-item"><a href="https://de.wikipedia.org/wiki/Verbriefung" title="Verbriefung – German" lang="de" hreflang="de" data-title="Verbriefung" data-language-autonym="Deutsch" data-language-local-name="German" class="interlanguage-link-target"><span>Deutsch</span></a></li><li class="interlanguage-link interwiki-el mw-list-item"><a href="https://el.wikipedia.org/wiki/%CE%A4%CE%B9%CF%84%CE%BB%CE%BF%CF%80%CE%BF%CE%AF%CE%B7%CF%83%CE%B7" title="Τιτλοποίηση – Greek" lang="el" hreflang="el" data-title="Τιτλοποίηση" data-language-autonym="Ελληνικά" data-language-local-name="Greek" class="interlanguage-link-target"><span>Ελληνικά</span></a></li><li class="interlanguage-link interwiki-es mw-list-item"><a href="https://es.wikipedia.org/wiki/Titulizaci%C3%B3n" title="Titulización – Spanish" lang="es" hreflang="es" data-title="Titulización" data-language-autonym="Español" data-language-local-name="Spanish" class="interlanguage-link-target"><span>Español</span></a></li><li class="interlanguage-link interwiki-fr mw-list-item"><a href="https://fr.wikipedia.org/wiki/Titrisation" title="Titrisation – French" lang="fr" hreflang="fr" data-title="Titrisation" data-language-autonym="Français" data-language-local-name="French" class="interlanguage-link-target"><span>Français</span></a></li><li class="interlanguage-link interwiki-ko mw-list-item"><a href="https://ko.wikipedia.org/wiki/%EC%9C%A0%EB%8F%99%ED%99%94" title="유동화 – Korean" lang="ko" hreflang="ko" data-title="유동화" data-language-autonym="한국어" data-language-local-name="Korean" class="interlanguage-link-target"><span>한국어</span></a></li><li class="interlanguage-link interwiki-hi mw-list-item"><a href="https://hi.wikipedia.org/wiki/%E0%A4%AA%E0%A5%8D%E0%A4%B0%E0%A4%A4%E0%A4%BF%E0%A4%AD%E0%A5%82%E0%A4%A4%E0%A4%BF%E0%A4%95%E0%A4%B0%E0%A4%A3" title="प्रतिभूतिकरण – Hindi" lang="hi" hreflang="hi" data-title="प्रतिभूतिकरण" data-language-autonym="हिन्दी" data-language-local-name="Hindi" class="interlanguage-link-target"><span>हिन्दी</span></a></li><li class="interlanguage-link interwiki-id mw-list-item"><a href="https://id.wikipedia.org/wiki/Sekuritisasi" title="Sekuritisasi – Indonesian" lang="id" hreflang="id" data-title="Sekuritisasi" data-language-autonym="Bahasa Indonesia" data-language-local-name="Indonesian" class="interlanguage-link-target"><span>Bahasa Indonesia</span></a></li><li class="interlanguage-link interwiki-it mw-list-item"><a href="https://it.wikipedia.org/wiki/Cartolarizzazione" title="Cartolarizzazione – Italian" lang="it" hreflang="it" data-title="Cartolarizzazione" data-language-autonym="Italiano" data-language-local-name="Italian" class="interlanguage-link-target"><span>Italiano</span></a></li><li class="interlanguage-link interwiki-he mw-list-item"><a href="https://he.wikipedia.org/wiki/%D7%90%D7%99%D7%92%D7%95%D7%97" title="איגוח – Hebrew" lang="he" hreflang="he" data-title="איגוח" data-language-autonym="עברית" data-language-local-name="Hebrew" class="interlanguage-link-target"><span>עברית</span></a></li><li class="interlanguage-link interwiki-mk mw-list-item"><a href="https://mk.wikipedia.org/wiki/%D0%A1%D0%B5%D0%BA%D1%98%D1%83%D1%80%D0%B8%D1%82%D0%B8%D0%B7%D0%B0%D1%86%D0%B8%D1%98%D0%B0" title="Секјуритизација – Macedonian" lang="mk" hreflang="mk" data-title="Секјуритизација" data-language-autonym="Македонски" data-language-local-name="Macedonian" class="interlanguage-link-target"><span>Македонски</span></a></li><li class="interlanguage-link interwiki-nl mw-list-item"><a href="https://nl.wikipedia.org/wiki/Securitisatie" title="Securitisatie – Dutch" lang="nl" hreflang="nl" data-title="Securitisatie" data-language-autonym="Nederlands" data-language-local-name="Dutch" class="interlanguage-link-target"><span>Nederlands</span></a></li><li class="interlanguage-link interwiki-ja mw-list-item"><a href="https://ja.wikipedia.org/wiki/%E8%A8%BC%E5%88%B8%E5%8C%96" title="証券化 – Japanese" lang="ja" hreflang="ja" data-title="証券化" data-language-autonym="日本語" data-language-local-name="Japanese" class="interlanguage-link-target"><span>日本語</span></a></li><li class="interlanguage-link interwiki-no mw-list-item"><a href="https://no.wikipedia.org/wiki/Verdipapirisering" title="Verdipapirisering – Norwegian Bokmål" lang="nb" hreflang="nb" data-title="Verdipapirisering" data-language-autonym="Norsk bokmål" data-language-local-name="Norwegian Bokmål" class="interlanguage-link-target"><span>Norsk bokmål</span></a></li><li class="interlanguage-link interwiki-oc mw-list-item"><a href="https://oc.wikipedia.org/wiki/Titrizacion" title="Titrizacion – Occitan" lang="oc" hreflang="oc" data-title="Titrizacion" data-language-autonym="Occitan" data-language-local-name="Occitan" class="interlanguage-link-target"><span>Occitan</span></a></li><li class="interlanguage-link interwiki-pl mw-list-item"><a href="https://pl.wikipedia.org/wiki/Sekurytyzacja" title="Sekurytyzacja – Polish" lang="pl" hreflang="pl" data-title="Sekurytyzacja" data-language-autonym="Polski" data-language-local-name="Polish" class="interlanguage-link-target"><span>Polski</span></a></li><li class="interlanguage-link interwiki-pt mw-list-item"><a href="https://pt.wikipedia.org/wiki/Securitiza%C3%A7%C3%A3o" title="Securitização – Portuguese" lang="pt" hreflang="pt" data-title="Securitização" data-language-autonym="Português" data-language-local-name="Portuguese" class="interlanguage-link-target"><span>Português</span></a></li><li class="interlanguage-link interwiki-ru mw-list-item"><a href="https://ru.wikipedia.org/wiki/%D0%A1%D0%B5%D0%BA%D1%8C%D1%8E%D1%80%D0%B8%D1%82%D0%B8%D0%B7%D0%B0%D1%86%D0%B8%D1%8F" title="Секьюритизация – Russian" lang="ru" hreflang="ru" data-title="Секьюритизация" data-language-autonym="Русский" data-language-local-name="Russian" class="interlanguage-link-target"><span>Русский</span></a></li><li class="interlanguage-link interwiki-sr mw-list-item"><a href="https://sr.wikipedia.org/wiki/Sekjuritizacija" title="Sekjuritizacija – Serbian" lang="sr" hreflang="sr" data-title="Sekjuritizacija" data-language-autonym="Српски / srpski" data-language-local-name="Serbian" class="interlanguage-link-target"><span>Српски / srpski</span></a></li><li class="interlanguage-link interwiki-fi mw-list-item"><a href="https://fi.wikipedia.org/wiki/Arvopaperistaminen" title="Arvopaperistaminen – Finnish" lang="fi" hreflang="fi" data-title="Arvopaperistaminen" data-language-autonym="Suomi" data-language-local-name="Finnish" class="interlanguage-link-target"><span>Suomi</span></a></li><li class="interlanguage-link interwiki-sv mw-list-item"><a href="https://sv.wikipedia.org/wiki/V%C3%A4rdepapperisering" title="Värdepapperisering – Swedish" lang="sv" hreflang="sv" data-title="Värdepapperisering" data-language-autonym="Svenska" data-language-local-name="Swedish" class="interlanguage-link-target"><span>Svenska</span></a></li><li class="interlanguage-link interwiki-ta mw-list-item"><a href="https://ta.wikipedia.org/wiki/%E0%AE%AA%E0%AE%BE%E0%AE%A4%E0%AF%81%E0%AE%95%E0%AE%BE%E0%AE%AA%E0%AF%8D%E0%AE%AA%E0%AF%81%E0%AE%AA%E0%AF%8D_%E0%AE%AA%E0%AE%A4%E0%AF%8D%E0%AE%A4%E0%AE%BF%E0%AE%B0%E0%AE%AE%E0%AE%AF%E0%AE%AE%E0%AE%BE%E0%AE%95%E0%AF%8D%E0%AE%95%E0%AE%B2%E0%AF%8D" title="பாதுகாப்புப் பத்திரமயமாக்கல் – Tamil" lang="ta" hreflang="ta" data-title="பாதுகாப்புப் பத்திரமயமாக்கல்" data-language-autonym="தமிழ்" data-language-local-name="Tamil" class="interlanguage-link-target"><span>தமிழ்</span></a></li><li class="interlanguage-link interwiki-tr mw-list-item"><a href="https://tr.wikipedia.org/wiki/Varl%C4%B1%C4%9Fa_Dayal%C4%B1_Menkul_K%C4%B1ymet" title="Varlığa Dayalı Menkul Kıymet – Turkish" lang="tr" hreflang="tr" data-title="Varlığa Dayalı Menkul Kıymet" data-language-autonym="Türkçe" data-language-local-name="Turkish" class="interlanguage-link-target"><span>Türkçe</span></a></li><li class="interlanguage-link interwiki-uk mw-list-item"><a href="https://uk.wikipedia.org/wiki/%D0%A1%D0%B5%D0%BA%27%D1%8E%D1%80%D0%B8%D1%82%D0%B8%D0%B7%D0%B0%D1%86%D1%96%D1%8F_%D0%B0%D0%BA%D1%82%D0%B8%D0%B2%D1%96%D0%B2" title="Сек'юритизація активів – Ukrainian" lang="uk" hreflang="uk" data-title="Сек'юритизація активів" data-language-autonym="Українська" data-language-local-name="Ukrainian" class="interlanguage-link-target"><span>Українська</span></a></li><li class="interlanguage-link interwiki-vi mw-list-item"><a href="https://vi.wikipedia.org/wiki/Ch%E1%BB%A9ng_kho%C3%A1n_h%C3%B3a" title="Chứng khoán hóa 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.hatnote{display:none!important}}</style><div role="note" class="hatnote navigation-not-searchable">Not to be confused with <a href="/wiki/Securitization_(international_relations)" title="Securitization (international relations)">Securitization (international relations)</a>.</div> <p><b>Securitization</b> is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans, or credit card debt obligations (or other non-debt assets which generate receivables) and selling their related cash flows to third party investors as <a href="/wiki/Security_(finance)" title="Security (finance)">securities</a>, which may be described as <a href="/wiki/Bond_(finance)" title="Bond (finance)">bonds</a>, <a href="/wiki/Pass-through_security" class="mw-redirect" title="Pass-through security">pass-through securities</a>, or <a href="/wiki/Collateralized_debt_obligation" title="Collateralized debt obligation">collateralized debt obligations</a> (CDOs).<sup id="cite_ref-1" class="reference"><a href="#cite_note-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup> Investors are repaid from the principal and interest cash flows collected from the underlying debt and redistributed through the capital structure of the new financing. Securities backed by mortgage receivables are called <a href="/wiki/Mortgage-backed_security" title="Mortgage-backed security">mortgage-backed securities</a> (MBS), while those backed by other types of receivables are <a href="/wiki/Asset-backed_security" title="Asset-backed security">asset-backed securities</a> (ABS). </p><p>The <a href="/wiki/Granularity" title="Granularity">granularity</a> of pools of securitized assets can mitigate the <a href="/wiki/Credit_risk" title="Credit risk">credit risk</a> of individual borrowers. Unlike general <a href="/wiki/Corporate_debt" class="mw-redirect" title="Corporate debt">corporate debt</a>, the <a href="/wiki/Credit_quality" class="mw-redirect" title="Credit quality">credit quality</a> of securitized debt is non-<a href="/wiki/Stationary_process" title="Stationary process">stationary</a> due to changes in volatility that are time- and structure-dependent. If the transaction is properly structured and the pool performs as expected, the credit risk of all <a href="/wiki/Tranche" title="Tranche">tranches</a> of structured debt improves; if improperly structured, the affected tranches may experience dramatic credit deterioration and loss.<sup id="cite_ref-2" class="reference"><a href="#cite_note-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> </p><p>Securitization has evolved from its beginnings in the late 18th century to an estimated outstanding of $10.24 trillion in the United States and $2.25 trillion in Europe as of the 2nd quarter of 2008. In 2007, <a href="/wiki/Asset-backed_security" title="Asset-backed security">ABS</a> issuance amounted to $3.455 trillion in the US and $652 billion in Europe.<sup id="cite_ref-SIFMA_3-0" class="reference"><a href="#cite_note-SIFMA-3"><span class="cite-bracket">[</span>3<span class="cite-bracket">]</span></a></sup> WBS (Whole Business Securitization) arrangements first appeared in the <a href="/wiki/United_Kingdom" title="United Kingdom">United Kingdom</a> in the 1990s, and became common in various <a href="/wiki/British_Commonwealth" class="mw-redirect" title="British Commonwealth">Commonwealth</a> legal systems where senior creditors of an insolvent business effectively gain the right to control the company.<sup id="cite_ref-4" class="reference"><a href="#cite_note-4"><span class="cite-bracket">[</span>4<span class="cite-bracket">]</span></a></sup> </p> <meta property="mw:PageProp/toc" /> <div class="mw-heading mw-heading2"><h2 id="Structure">Structure</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=1" title="Edit section: Structure"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <div class="mw-heading mw-heading3"><h3 id="Pooling_and_transfer">Pooling and transfer</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=2" title="Edit section: Pooling and transfer"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>The <b>originator</b> initially owns the assets engaged in the deal. This is typically a company looking to either raise capital, restructure debt or otherwise adjust its finances (but also includes businesses established specifically to generate marketable debt (consumer or otherwise) for the purpose of subsequent securitization). Under traditional <a href="/wiki/Corporate_finance" title="Corporate finance">corporate finance</a> concepts, such a company would have three options to raise new capital: a <a href="/wiki/Loan" title="Loan">loan</a>, <a href="/wiki/Bond_issue" class="mw-redirect" title="Bond issue">bond issue</a>, or issuance of <a href="/wiki/Share_capital" title="Share capital">stock</a>. However, stock offerings dilute the ownership and control of the company, while loan or bond financing is often prohibitively expensive due to the <a href="/wiki/Credit_rating" title="Credit rating">credit rating</a> of the company and the associated rise in <a href="/wiki/Interest" title="Interest">interest</a> rates. </p><p>The consistently revenue-generating part of the company may have a much higher credit rating than the company as a whole. For instance, a leasing company may have provided $10m nominal value of leases, and it will receive a cash flow over the next five years from these. It cannot demand early repayment on the leases and so cannot get its money back early if required. If it could sell the rights to the cash flows from the leases to someone else, it could transform that income stream into a lump sum today (in effect, receiving today the present value of a future cash flow). Where the originator is a bank or other organization that must meet capital adequacy requirements, the structure is usually more complex because a separate company is set up to buy the assets. </p><p>A suitably large portfolio of assets is "pooled" and transferred to a "<b><a href="/wiki/Special_purpose_vehicle" class="mw-redirect" title="Special purpose vehicle">special purpose vehicle</a></b>" or "<b>SPV</b>" (the <b>issuer</b>), a tax-exempt company or trust formed for the specific purpose of funding the assets. Once the assets are transferred to the issuer, there is normally no recourse to the originator. The issuer is "<a href="/wiki/Bankruptcy" title="Bankruptcy">bankruptcy</a> remote", meaning that if the originator goes into bankruptcy, the assets of the issuer will not be distributed to the creditors of the originator. In order to achieve this, the governing documents of the issuer restrict its activities to only those necessary to complete the issuance of securities. Many issuers are typically <a href="/wiki/Orphan_structure" title="Orphan structure">"orphaned"</a>. In the case of certain assets, such as credit card debt, where the portfolio is made up of a constantly changing pool of receivables, a trust in favor of the SPV may be declared in place of traditional transfer by assignment (see <a href="#Master_trust">the outline of the master trust structure</a> below). </p><p><a href="/wiki/Accounting" title="Accounting">Accounting</a> standards govern when such a transfer is a true sale, a financing, a partial sale, or a part-sale and part-financing.<sup id="cite_ref-fasb_5-0" class="reference"><a href="#cite_note-fasb-5"><span class="cite-bracket">[</span>5<span class="cite-bracket">]</span></a></sup> In a true sale, the originator is allowed to remove the transferred assets from its balance sheet: in a financing, the assets are considered to remain the property of the originator.<sup id="cite_ref-sofabs_6-0" class="reference"><a href="#cite_note-sofabs-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup> Under US accounting standards, the originator achieves a sale by being at <a href="/wiki/Arm%27s_length" class="mw-redirect" title="Arm's length">arm's length</a> from the issuer, in which case the issuer is classified as a "<b>qualifying special purpose entity</b>" or "<b>qSPE</b>". </p><p>Because of these structural issues, the originator typically needs the help of an <a href="/wiki/Investment_bank" class="mw-redirect" title="Investment bank">investment bank</a> (the <b>arranger</b>) in setting up the structure of the transaction. </p> <div class="mw-heading mw-heading3"><h3 id="Issuance">Issuance</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=3" title="Edit section: Issuance"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>To be able to buy the assets from the originator, the issuer SPV issues <a href="/wiki/Tradable_securities" class="mw-redirect" title="Tradable securities">tradable securities</a> to fund the purchase. Investors purchase the securities, either through a private offering (targeting <a href="/wiki/Institutional_investor" title="Institutional investor">institutional investors</a>) or on the open market. The performance of the securities is then directly linked to the performance of the assets. <a href="/wiki/Credit_rating_agency" title="Credit rating agency">Credit rating agencies</a> rate the securities which are issued to provide an external perspective on the liabilities being created and help the investor make a more informed decision. </p><p>In transactions with static assets, a <b>depositor</b> will assemble the underlying collateral, help structure the securities and work with the financial markets to sell the securities to investors. The depositor has taken on added significance under <a href="/wiki/Regulation_AB" title="Regulation AB">Regulation AB</a>. The depositor typically owns 100% of the beneficial interest in the issuing entity and is usually the parent or a wholly owned subsidiary of the parent which initiates the transaction. In transactions with managed (traded) assets, <b>asset managers</b> assemble the underlying collateral, help structure the securities and work with the financial markets in order to sell the securities to investors. </p><p>Some deals may include a third-party <b>guarantor</b> which provides guarantees or partial guarantees for the assets, the principal and the interest payments, for a fee. </p><p>The securities can be issued with either a fixed <a href="/wiki/Interest" title="Interest">interest</a> rate or a floating rate under currency pegging system. Fixed rate ABS set the "<a href="/wiki/Coupon_(finance)" title="Coupon (finance)">coupon</a>" (rate) at the time of issuance, in a fashion similar to corporate bonds and T-Bills. Floating rate securities may be backed by both amortizing and non-amortizing assets in the floating market. In contrast to fixed rate securities, the rates on "floaters" will periodically adjust up or down according to a designated index such as a U.S. Treasury rate, or, more typically, the <a href="/wiki/London_Interbank_Offered_Rate" class="mw-redirect" title="London Interbank Offered Rate">London Interbank Offered Rate</a> (LIBOR). The floating rate usually reflects the movement in the index plus an additional fixed margin to cover the added risk.<sup id="cite_ref-Dwight_7-0" class="reference"><a href="#cite_note-Dwight-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="Credit_enhancement_and_tranching">Credit enhancement and tranching</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=4" title="Edit section: Credit enhancement and tranching"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>Unlike conventional corporate bonds which are unsecured, securities created in a securitization are "<a href="/wiki/Credit_enhancement" title="Credit enhancement">credit enhanced</a>", meaning their credit quality is increased above that of the originator's unsecured debt or underlying asset pool. This increases the likelihood that the investors will receive the cash flows to which they are entitled, and thus enables the securities to have a higher credit rating than the originator. Some securitizations use external credit enhancement provided by third parties, such as <a href="/wiki/Surety_bond" class="mw-redirect" title="Surety bond">surety bonds</a> and parental <a href="/wiki/Guaranty" class="mw-redirect" title="Guaranty">guarantees</a> (although this may introduce a conflict of interest). </p><p>The issued securities are often split into <b><a href="/wiki/Tranche" title="Tranche">tranches</a></b>, or categorized into varying degrees of <a href="/wiki/Subordination_(finance)" title="Subordination (finance)">subordination</a>. Each tranche has a different level of credit protection or risk exposure: there is generally a senior ("A") class of securities and one or more junior subordinated ("B", "C", etc.) classes that function as protective layers for the "A" class. The senior classes have first claim on the cash that the SPV receives, and the more junior classes only start receiving repayment after the more senior classes have been repaid. Because of the cascading effect between classes, this arrangement is often referred to as a <b>cash flow waterfall</b>.<sup id="cite_ref-8" class="reference"><a href="#cite_note-8"><span class="cite-bracket">[</span>8<span class="cite-bracket">]</span></a></sup> If the underlying asset pool becomes insufficient to make payments on the securities (e.g. when loans default within a portfolio of loan claims), the loss is absorbed first by the subordinated tranches, and the upper-level tranches remain unaffected until the losses exceed the entire amount of the subordinated tranches. The senior securities might be AAA or AA rated, signifying a lower risk, while the lower-credit quality subordinated classes receive a lower credit rating, signifying a higher risk.<sup id="cite_ref-Dwight_7-1" class="reference"><a href="#cite_note-Dwight-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup> </p><p>The most junior class (often called the <b>equity class</b>) is the most exposed to payment risk. In some cases, this is a special type of instrument which is retained by the originator as a potential profit flow. In some cases the equity class receives no coupon (either fixed or floating), but only the residual cash flow (if any) after all the other classes have been paid. </p><p>There may also be a special class which absorbs early repayments in the underlying assets. This is often the case where the underlying assets are mortgages which, in essence, are repaid whenever the properties are sold. Since any early repayments are passed on to this class, it means the other investors have a more predictable cash flow. </p><p>If the underlying assets are mortgages or loans, there are usually two separate "waterfalls" because the principal and interest receipts can be easily allocated and matched. But if the assets are income-based transactions such as rental deals one cannot categorise the revenue so easily between income and principal repayment. In this case all the revenue is used to pay the cash flows due on the bonds as those cash flows become due. </p><p>Credit enhancements affect credit risk by providing more or less protection for promised cash flows for a security. Additional protection can help a security achieve a higher rating, lower protection can help create new securities with differently desired risks, and these differential protections can make the securities more attractive. </p><p>In addition to subordination, credit may be enhanced through:<sup id="cite_ref-sofabs_6-1" class="reference"><a href="#cite_note-sofabs-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup> </p> <ul><li>A <b>reserve</b> or <b>spread account</b>, in which funds remaining after expenses such as principal and interest payments, charge-offs and other fees have been paid-off are accumulated, and can be used when SPE expenses are greater than its income.</li> <li>Third-party <a href="/wiki/Insurance" title="Insurance">insurance</a>, or guarantees of principal and interest payments on the securities.</li> <li><b>Over-collateralisation</b>, usually by using finance income to pay off principal on some securities before principal on the corresponding share of collateral is collected.</li> <li><b>Cash funding</b> or a <b>cash collateral account</b>, generally consisting of short-term, highly rated investments purchased either from the seller's own funds, or from funds borrowed from third parties that can be used to make up shortfalls in promised cash flows.</li> <li>A third-party <b><a href="/wiki/Letter_of_credit" title="Letter of credit">letter of credit</a></b> or corporate guarantee.</li> <li>A back-up servicer for the loans.</li> <li>Discounted receivables for the pool.</li></ul> <div class="mw-heading mw-heading3"><h3 id="Servicing">Servicing</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=5" title="Edit section: Servicing"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>A <b>servicer</b> collects payments and monitors the assets that are the crux of the structured financial deal. The servicer can often be the originator, because the servicer needs very similar expertise to the originator and would want to ensure that loan repayments are paid to the Special Purpose Vehicle. </p><p>The servicer can significantly affect the cash flows to the investors because it controls the collection policy, which influences the proceeds collected, the charge-offs and the recoveries on the loans. Any income remaining after payments and expenses is usually accumulated to some extent in a reserve or spread account, and any further excess is returned to the seller. Bond rating agencies publish ratings of asset-backed securities based on the performance of the collateral pool, the credit enhancements and the <a href="/wiki/Probability_of_default" title="Probability of default">probability of default</a>.<sup id="cite_ref-sofabs_6-2" class="reference"><a href="#cite_note-sofabs-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup> </p><p>When the issuer is structured as a trust, the <b>trustee</b> is a vital part of the deal as the gate-keeper of the assets that are being held in the issuer. Even though the trustee is part of the SPV, which is typically wholly owned by the Originator, the trustee has a <a href="/wiki/Fiduciary" title="Fiduciary">fiduciary</a> duty to protect the assets and those who own the assets, typically the investors. </p> <div class="mw-heading mw-heading3"><h3 id="Repayment_structures">Repayment structures</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=6" title="Edit section: Repayment structures"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>Unlike corporate bonds, most securitizations are <a href="/wiki/Amortizing_loan" title="Amortizing loan">amortized</a>, meaning that the principal amount borrowed is paid back gradually over the specified term of the loan, rather than in one lump sum at the maturity of the loan. Fully amortizing securitizations are generally collateralised by fully amortizing assets, such as <a href="/wiki/Home_equity_loan" title="Home equity loan">home equity loans</a>, auto loans, and <a href="/wiki/Student_loan" title="Student loan">student loans</a>. Prepayment uncertainty is an important concern with fully amortizing ABS. The possible rate of prepayment varies widely with the type of underlying asset pool, so many prepayment models have been developed to try to define common prepayment activity. The <a href="/wiki/PSA_prepayment_model" title="PSA prepayment model">PSA prepayment model</a> is a well-known example.<sup id="cite_ref-Dwight_7-2" class="reference"><a href="#cite_note-Dwight-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-Committee_9-0" class="reference"><a href="#cite_note-Committee-9"><span class="cite-bracket">[</span>9<span class="cite-bracket">]</span></a></sup> </p><p>A controlled amortization structure can give investors a more predictable repayment schedule, even though the underlying assets may be nonamortising. After a predetermined "revolving period", during which only interest payments are made, these securitizations attempt to return principal to investors in a series of defined periodic payments, usually within a year. An early amortization event is the risk of the debt being retired early.<sup id="cite_ref-Dwight_7-3" class="reference"><a href="#cite_note-Dwight-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup> </p><p>On the other hand, <b>bullet</b> or <b>slug</b> structures return the principal to investors in a single payment. The most common bullet structure is called the <b>soft bullet</b>, meaning that the final bullet payment is not guaranteed to be paid on the scheduled maturity date; however, the majority of these securitizations are paid on time. The second type of bullet structure is the <b>hard bullet</b>, which guarantees that the principal will be paid on the scheduled maturity date. Hard bullet structures are less common for two reasons: investors are comfortable with soft bullet structures, and they are reluctant to accept the lower yields of hard bullet securities in exchange for a guarantee.<sup id="cite_ref-Dwight_7-4" class="reference"><a href="#cite_note-Dwight-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup> </p><p>Securitizations are often structured as a <a href="/w/index.php?title=Sequential_pay_bond&action=edit&redlink=1" class="new" title="Sequential pay bond (page does not exist)">sequential pay bond</a>, paid off in a sequential manner based on maturity. This means that the first tranche, which may have a one-year average life, will receive all principal payments until it is retired; then the second tranche begins to receive principal, and so forth.<sup id="cite_ref-Dwight_7-5" class="reference"><a href="#cite_note-Dwight-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup> <a href="/w/index.php?title=Pro_rata_bond&action=edit&redlink=1" class="new" title="Pro rata bond (page does not exist)">Pro rata bond</a> structures pay each tranche a proportionate share of principal throughout the life of the security.<sup id="cite_ref-Dwight_7-6" class="reference"><a href="#cite_note-Dwight-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="Structural_risks_and_misincentives">Structural risks and misincentives</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=7" title="Edit section: Structural risks and misincentives"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>Some originators (e.g. of mortgages) have prioritised loan volume over credit quality, disregarding the long-term risk of the assets they have created in their enthusiasm to profit from the fees associated with origination and securitization. Other originators, aware of the reputational harm and added expense if risky loans are subject to repurchase requests or improperly originated loans lead to litigation, have paid more attention to credit quality.<sup class="noprint Inline-Template Template-Fact" style="white-space:nowrap;">[<i><a href="/wiki/Wikipedia:Citation_needed" title="Wikipedia:Citation needed"><span title="This claim needs references to reliable sources. (April 2014)">citation needed</span></a></i>]</sup> </p> <div class="mw-heading mw-heading2"><h2 id="Special_types_of_securitization">Special types of securitization</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=8" title="Edit section: Special types of securitization"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <div class="mw-heading mw-heading3"><h3 id="Master_trust">Master trust</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=9" title="Edit section: Master trust"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>A master trust is a type of SPV particularly suited to handle revolving <a href="/wiki/Credit_card" title="Credit card">credit card</a> balances, and has the flexibility to handle different securities at different times. In a typical master trust transaction, an originator of credit card receivables transfers a pool of those receivables to the trust and then the trust issues securities backed by these receivables. Often there will be many tranched securities issued by the trust all based on one set of receivables. After this transaction, typically the originator would continue to service the receivables, in this case the credit cards. </p><p>There are various risks involved with master trusts specifically. One risk is that timing of cash flows promised to investors might be different from timing of payments on the receivables. For example, credit card-backed securities can have maturities of up to 10 years, but credit card-backed receivables usually pay off much more quickly. To solve this issue these securities typically have a revolving period, an accumulation period, and an amortization period. All three of these periods are based on historical experience of the receivables. During the revolving period, principal payments received on the credit card balances are used to purchase additional receivables. During the accumulation period, these payments are accumulated in a separate account. During the amortization period, new payments are passed through to the investors. </p><p>A second risk is that the total investor interests and the seller's interest are limited to receivables generated by the credit cards, but the seller (originator) owns the accounts. This can cause issues with how the seller controls the terms and conditions of the accounts. Typically to solve this, there is language written into the securitization to protect the investors and potential receivables. </p><p>A third risk is that payments on the receivables can shrink the pool balance and under-collateralize total investor interest. To prevent this, often there is a required minimum seller's interest, and if there was a decrease then an early amortization event would occur.<sup id="cite_ref-sofabs_6-3" class="reference"><a href="#cite_note-sofabs-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="Issuance_trust">Issuance trust</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=10" title="Edit section: Issuance trust"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>In 2000, <a href="/wiki/Citibank" title="Citibank">Citibank</a> introduced a new structure for credit card-backed securities, called an issuance trust, which does not have limitations that master trusts sometimes do, that requires each issued series of securities to have both a senior and subordinate tranche. There are other benefits to an issuance trust: they provide more flexibility in issuing senior/subordinate securities, can increase demand because pension funds are eligible to invest in investment-grade securities issued by them, and they can significantly reduce the cost of issuing securities. Because of these issues, issuance trusts are now the dominant structure used by major issuers of credit card-backed securities.<sup id="cite_ref-sofabs_6-4" class="reference"><a href="#cite_note-sofabs-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="Grantor_trust">Grantor trust</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=11" title="Edit section: Grantor trust"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>Grantor trusts are typically used in automobile-backed securities and REMICs (Real Estate Mortgage Investment Conduits). Grantor trusts are very similar to pass-through trusts used in the earlier days of securitization. An originator pools together loans and sells them to a grantor trust, which issues classes of securities backed by these loans. Principal and interest received on the loans, after expenses are taken into account, are passed through to the holders of the securities on a pro-rata basis.<sup id="cite_ref-Reis-Roy_1998_298–304_10-0" class="reference"><a href="#cite_note-Reis-Roy_1998_298–304-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="Owner_trust">Owner trust</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=12" title="Edit section: Owner trust"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>In an owner trust, there is more flexibility in allocating principal and interest received to different classes of issued securities. In an owner trust, both interest and principal due to subordinate securities can be used to pay senior securities. Due to this, owner trusts can tailor maturity, risk and return profiles of issued securities to investor needs. Usually, any income remaining after expenses is kept in a reserve account up to a specified level and then after that, all income is returned to the seller. Owner trusts allow credit risk to be mitigated by over-collateralization by using <a href="/wiki/Excess_reserves" title="Excess reserves">excess reserves</a> and excess finance income to prepay securities before principal, which leaves more collateral for the other classes. </p> <div class="mw-heading mw-heading2"><h2 id="Motives_for_securitization">Motives for securitization</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=13" title="Edit section: Motives for securitization"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <div class="mw-heading mw-heading3"><h3 id="Advantages_to_issuer">Advantages to issuer</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=14" title="Edit section: Advantages to issuer"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p><b>Reduces funding costs</b>: Through securitization, a company rated BB but with AAA worthy cash flow would be able to borrow at possibly AAA rates. This is the number one reason to securitize a cash flow and can have tremendous impacts on borrowing costs. The difference between BB <a href="/wiki/Debt" title="Debt">debt</a> and AAA debt can be multiple hundreds of <a href="/wiki/Basis_point" title="Basis point">basis points</a>. For example, Moody's downgraded Ford Motor Credit's rating in January 2002, but senior automobile backed securities, issued by Ford Motor Credit in January 2002 and April 2002, continue to be rated AAA because of the strength of the underlying collateral and other credit enhancements.<sup id="cite_ref-sofabs_6-5" class="reference"><a href="#cite_note-sofabs-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup> </p><p><b>Reduces <a href="/wiki/Asset-liability_mismatch" class="mw-redirect" title="Asset-liability mismatch">asset-liability mismatch</a></b>: "Depending on the structure chosen, securitization can offer perfect matched funding by eliminating funding exposure in terms of both <a href="/wiki/Bond_duration" class="mw-redirect" title="Bond duration">duration</a> and pricing basis."<sup id="cite_ref-handbook_11-0" class="reference"><a href="#cite_note-handbook-11"><span class="cite-bracket">[</span>11<span class="cite-bracket">]</span></a></sup> Essentially, in most banks and finance companies, the liability book or the funding is from borrowings. This often comes at a high cost. Securitization allows such banks and finance companies to create a self-funded asset book. </p><p><b>Lower <a href="/wiki/Economic_capital" title="Economic capital">capital</a> requirements</b>: Some firms, due to legal, <a href="/wiki/Regulatory" class="mw-redirect" title="Regulatory">regulatory</a>, or other reasons, have a limit or range that their leverage is allowed to be. By securitizing some of their assets, which qualifies as a sale for accounting purposes, these firms will be able to remove assets from their balance sheets while maintaining the "earning power" of the assets.<sup id="cite_ref-Reis-Roy_1998_298–304_10-1" class="reference"><a href="#cite_note-Reis-Roy_1998_298–304-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> </p><p><b>Locking in profits</b>: For a given block of business, the total profits have not yet emerged and thus remain uncertain. Once the block has been securitized, the level of profits has now been locked in for that company, thus the risk of profit not emerging, or the benefit of super-profits, has now been passed on. </p><p><b>Transfer risks</b> (<a href="/wiki/Credit_(finance)" class="mw-redirect" title="Credit (finance)">credit</a>, <a href="/wiki/Liquidity" title="Liquidity">liquidity</a>, <a href="/wiki/Prepayment_of_loan" title="Prepayment of loan">prepayment</a>, reinvestment, asset concentration): Securitization makes it possible to transfer risks from an entity that does not want to bear it, to one that does. Two good examples of this are <a href="/wiki/Catastrophe_bond" title="Catastrophe bond">catastrophe bonds</a> and Entertainment Securitizations. Similarly, by securitizing a block of business (thereby locking in a degree of profits), the company has effectively freed up its balance to go out and write more profitable business. </p><p><b>Off balance sheet</b>: <a href="/wiki/Derivative_(finance)" title="Derivative (finance)">Derivatives</a> of many types have in the past been referred to as "<a href="/wiki/Off-balance-sheet" title="Off-balance-sheet">off-balance-sheet</a>". This term implies that the use of derivatives has no balance sheet impact. While there are differences among the various accounting standards internationally, there is a general trend towards the requirement to record derivatives at fair value on the balance sheet. There is also a generally accepted principle that, where derivatives are being used as a hedge against underlying assets or liabilities, accounting adjustments are required to ensure that the gain/loss on the hedged instrument is recognized in the income statement on a similar basis as the underlying assets and liabilities. Certain credit derivatives products, particularly Credit Default Swaps, now have more or less universally accepted market standard documentation. In the case of Credit Default Swaps, this documentation has been formulated by the <a href="/wiki/International_Swaps_and_Derivatives_Association" title="International Swaps and Derivatives Association">International Swaps and Derivatives Association</a> (ISDA) who have for a long time provided documentation on how to treat such derivatives on balance sheets. </p><p><b><a href="/wiki/Earnings" title="Earnings">Earnings</a></b>: Securitization makes it possible to record an earnings bounce without any real addition to the firm. When a securitization takes place, there often is a "true sale" that takes place between the Originator (the parent company) and the SPE. This sale has to be for the market value of the underlying assets for the "true sale" to stick and thus this sale is reflected on the parent company's balance sheet, which will boost earnings for that quarter by the amount of the sale. While not illegal in any respect, this does distort the true earnings of the parent company. </p><p><b>Admissibility</b>: Future cashflows may not get full credit in a company's accounts (life insurance companies, for example, may not always get full credit for future surpluses in their regulatory balance sheet), and a securitization effectively turns an admissible future surplus flow into an admissible immediate cash asset. </p><p><b><a href="/wiki/Liquidity" title="Liquidity">Liquidity</a></b>: Future cashflows may simply be balance sheet items which currently are not available for spending, whereas once the book has been securitized, the cash would be available for immediate spending or investment. This also creates a reinvestment book which may well be at better rates. </p> <div class="mw-heading mw-heading3"><h3 id="Disadvantages_to_issuer">Disadvantages to issuer</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=15" title="Edit section: Disadvantages to issuer"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p><b>May reduce portfolio quality</b>: If the AAA risks, for example, are being securitized out, this would leave a materially worse quality of residual risk. </p><p><b>Costs</b>: Securitizations are expensive due to management and system costs, <a href="/wiki/Legal_fees" class="mw-redirect" title="Legal fees">legal fees</a>, <a href="/wiki/Underwriting" title="Underwriting">underwriting</a> fees, rating fees and ongoing administration. An allowance for unforeseen costs is usually essential in securitizations, especially if it is an atypical securitization. </p><p><b>Size limitations</b>: Securitizations often require large scale structuring, and thus may not be cost-efficient for small and medium transactions. </p><p><b>Risks</b>: Since securitization is a structured transaction, it may include par structures as well as credit enhancements that are subject to risks of impairment, such as prepayment, as well as credit loss, especially for structures where there are some retained strips. </p> <div class="mw-heading mw-heading3"><h3 id="Advantages_to_investors">Advantages to investors</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=16" title="Edit section: Advantages to investors"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p><b>Opportunity to potentially earn a higher <a href="/wiki/Rate_of_return" title="Rate of return">rate of return</a> (on a risk-adjusted basis)</b> </p><p><b>Opportunity to invest in a specific pool of high quality assets</b>: Due to the stringent requirements for corporations (for example) to attain high ratings, there is a dearth of highly rated entities that exist. Securitizations, however, allow for the creation of large quantities of AAA, AA or A rated bonds, and risk averse institutional investors, or investors that are required to invest in only highly rated assets, have access to a larger pool of investment options. </p><p><b><a href="/wiki/Portfolio_(finance)" title="Portfolio (finance)">Portfolio</a> <a href="/wiki/Diversification_(finance)" title="Diversification (finance)">diversification</a></b>: Depending on the securitization, <a href="/wiki/Hedge_fund" title="Hedge fund">hedge funds</a> as well as other institutional investors tend to like investing in bonds created through securitizations because they may be <a href="/wiki/Uncorrelated" class="mw-redirect" title="Uncorrelated">uncorrelated</a> to their other bonds and securities. </p><p><b>Isolation of credit risk from the parent entity</b>: Since the assets that are securitized are isolated (at least in theory) from the assets of the originating entity, under securitization it may be possible for the securitization to receive a higher credit rating than the "parent", because the underlying risks are different. For example, a small bank may be considered more risky than the mortgage loans it makes to its customers; were the mortgage loans to remain with the bank, the borrowers may effectively be paying higher interest (or, just as likely, the bank would be paying higher interest to its creditors, and hence less profitable). </p> <div class="mw-heading mw-heading3"><h3 id="Risks_to_investors">Risks to investors</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=17" title="Edit section: Risks to investors"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p><b><a href="/wiki/Liquidity_risk" title="Liquidity risk">Liquidity risk</a></b> </p><p><b>Credit/default</b>: Default risk is generally accepted as a borrower's inability to meet interest payment obligations on time.<sup id="cite_ref-12" class="reference"><a href="#cite_note-12"><span class="cite-bracket">[</span>12<span class="cite-bracket">]</span></a></sup> For ABS, default may occur when maintenance obligations on the underlying collateral are not sufficiently met as detailed in its prospectus. A key indicator of a particular security's default risk is its credit rating. Different tranches within the ABS are rated differently, with senior classes of most issues receiving the highest rating, and subordinated classes receiving correspondingly lower credit ratings.<sup id="cite_ref-Dwight_7-7" class="reference"><a href="#cite_note-Dwight-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup> Almost all mortgages, including reverse mortgages, and student loans, are now insured by the government, meaning that taxpayers are on the hook for any of these loans that go bad even if the asset is massively over-inflated. In other words, there are no limits or curbs on over-spending, or the liabilities to taxpayers. </p><p>However, the credit crisis of 2007–2008 has exposed a potential flaw in the securitization process—loan originators retain no residual risk for the loans they make, but collect substantial fees on loan issuance and securitization, which does not encourage improvement of underwriting standards. </p><p><b>Event risk</b> </p><p><b>Prepayment/reinvestment/early amortization</b>: The majority of revolving ABS are subject to some degree of early amortization risk. The risk stems from specific early amortization events or payout events that cause the security to be paid off prematurely. Typically, payout events include insufficient payments from the underlying borrowers, insufficient excess spread, a rise in the default rate on the underlying loans above a specified level, a decrease in credit enhancements below a specific level, and bankruptcy on the part of the sponsor or servicer.<sup id="cite_ref-Dwight_7-8" class="reference"><a href="#cite_note-Dwight-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup> </p><p><b>Currency interest rate fluctuations</b>: Like all fixed income securities, the prices of fixed rate ABS move in response to changes in interest rates. Fluctuations in interest rates affect floating rate ABS prices less than fixed rate securities, as the index against which the ABS rate adjusts will reflect interest rate changes in the economy. Furthermore, interest rate changes may affect the prepayment rates on underlying loans that back some types of ABS, which can affect yields. Home equity loans tend to be the most sensitive to changes in interest rates, while auto loans, student loans, and credit cards are generally less sensitive to interest rates.<sup id="cite_ref-Dwight_7-9" class="reference"><a href="#cite_note-Dwight-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup> </p><p><b>Contractual agreements</b> </p><p><b>Moral hazard</b>: Investors usually rely on the deal manager to price the securitizations' underlying assets. If the manager earns fees based on performance, there may be a temptation to mark up the prices of the portfolio assets. Conflicts of interest can also arise with senior note holders when the manager has a claim on the deal's excess spread.<sup id="cite_ref-Caveat_13-0" class="reference"><a href="#cite_note-Caveat-13"><span class="cite-bracket">[</span>13<span class="cite-bracket">]</span></a></sup> </p><p><b>Servicer risk</b>: The transfer or collection of payments may be delayed or reduced if the servicer becomes insolvent. This risk is mitigated by having a backup servicer involved in the transaction.<sup id="cite_ref-Dwight_7-10" class="reference"><a href="#cite_note-Dwight-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading2"><h2 id="History">History</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=18" title="Edit section: History"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>Among the early examples of mortgage-backed securities in the United States were the farm railroad mortgage bonds of the mid-19th century which contributed to the <a href="/wiki/Panic_of_1857" title="Panic of 1857">panic of 1857</a>.<sup id="cite_ref-14" class="reference"><a href="#cite_note-14"><span class="cite-bracket">[</span>14<span class="cite-bracket">]</span></a></sup> </p><p>In February 1970, the U.S. <a href="/wiki/Department_of_Housing_and_Urban_Development" class="mw-redirect" title="Department of Housing and Urban Development">Department of Housing and Urban Development</a> created the first modern residential mortgage-backed security. The Government National Mortgage Association (GNMA or <a href="/wiki/Ginnie_Mae" class="mw-redirect" title="Ginnie Mae">Ginnie Mae</a>) sold securities backed by a portfolio of mortgage loans.<sup id="cite_ref-germansecur_15-0" class="reference"><a href="#cite_note-germansecur-15"><span class="cite-bracket">[</span>15<span class="cite-bracket">]</span></a></sup> </p><p>To facilitate the securitization of non-mortgage assets, businesses substituted private credit enhancements. First, they over-collateralised pools of assets; shortly thereafter, they improved third-party and structural enhancements. In 1985, securitization techniques that had been developed in the mortgage market were applied for the first time to a class of non-mortgage assets—automobile loans. A pool of assets second only to mortgages in volume, auto loans were a good match for structured finance; their maturities, considerably shorter than those of mortgages, made the timing of cash flows more predictable, and their long statistical histories of performance gave investors confidence.<sup id="cite_ref-assetsecur_16-0" class="reference"><a href="#cite_note-assetsecur-16"><span class="cite-bracket">[</span>16<span class="cite-bracket">]</span></a></sup> </p><p>This early auto loan deal was a $60 million (~$144 million in 2023) securitization originated by Marine Midland Bank and securitised in 1985 by the Certificate for Automobile Receivables Trust (CARS, 1985–1).<sup id="cite_ref-house_17-0" class="reference"><a href="#cite_note-house-17"><span class="cite-bracket">[</span>17<span class="cite-bracket">]</span></a></sup> </p><p>The first significant bank credit card sale came to market in 1986 with a private placement of $50 million (~$118 million in 2023) of outstanding bank card loans. This transaction demonstrated to investors that, if the yields were high enough, loan pools could support asset sales with higher expected losses and administrative costs than was true within the mortgage market. Sales of this type—with no contractual obligation by the seller to provide recourse—allowed banks to receive sales treatment for accounting and regulatory purposes (easing balance sheet and capital constraints), while at the same time allowing them to retain origination and servicing fees. After the success of this initial transaction, investors grew to accept credit card receivables as collateral, and banks developed structures to normalize the cash flows.<sup id="cite_ref-assetsecur_16-1" class="reference"><a href="#cite_note-assetsecur-16"><span class="cite-bracket">[</span>16<span class="cite-bracket">]</span></a></sup> </p><p>Starting in the 1990s with some earlier private transactions, securitization technology was applied to a number of sectors of the <a href="/wiki/Reinsurance" title="Reinsurance">reinsurance</a> and <a href="/wiki/Insurance" title="Insurance">insurance</a> markets including life and catastrophe. This activity grew to nearly $15bn (~$21.8 billion in 2023) of issuance in 2006 following the disruptions in the underlying markets caused by <a href="/wiki/Hurricane_Katrina" title="Hurricane Katrina">Hurricane Katrina</a> and <a href="/w/index.php?title=Regulation_XXX&action=edit&redlink=1" class="new" title="Regulation XXX (page does not exist)">Regulation XXX</a>. Key areas of activity in the broad area of <a href="/wiki/Alternative_risk_transfer" title="Alternative risk transfer">alternative risk transfer</a> include <a href="/wiki/Catastrophe_bond" title="Catastrophe bond">catastrophe bonds</a>, <a href="/wiki/Life_Insurance_Securitization" class="mw-redirect" title="Life Insurance Securitization">Life Insurance Securitization</a> and <a href="/wiki/Reinsurance_sidecar" title="Reinsurance sidecar">reinsurance sidecars</a>. </p><p>The first public Securitization of <a href="/wiki/Community_Reinvestment_Act" title="Community Reinvestment Act">Community Reinvestment Act</a> (CRA) loans started in 1997. CRA loans are loans targeted to low and moderate income borrowers and neighborhoods.<sup id="cite_ref-18" class="reference"><a href="#cite_note-18"><span class="cite-bracket">[</span>18<span class="cite-bracket">]</span></a></sup> </p><p>As estimated by the <a href="/wiki/Bond_Market_Association" title="Bond Market Association">Bond Market Association</a>, in the United States, the total amount outstanding<sup class="noprint Inline-Template" style="margin-left:0.1em; white-space:nowrap;">[<i><a href="/wiki/Wikipedia:Please_clarify" title="Wikipedia:Please clarify"><span title="The text near this tag may need clarification or removal of jargon. (March 2015)">clarification needed</span></a></i>]</sup> at the end of 2004 was $1.8 (~$2.78 trillion in 2023) trillion. This amount was about 8 percent of total <a href="/wiki/Outstanding_bond" class="mw-redirect" title="Outstanding bond">outstanding bond</a> market debt ($23.6 trillion), about 33 percent of mortgage-related debt ($5.5 trillion), and about 39 percent of corporate debt ($4.7 trillion) in the United States. In nominal terms, over the previous ten years (1995–2004) ABS<sup class="noprint Inline-Template" style="margin-left:0.1em; white-space:nowrap;">[<i><a href="/wiki/Wikipedia:Please_clarify" title="Wikipedia:Please clarify"><span title="The text near this tag may need clarification or removal of jargon. (March 2015)">clarification needed</span></a></i>]</sup> amount outstanding had grown about 19 percent annually, with mortgage-related debt and corporate debt each growing at about 9 percent. Gross public issuance of asset-backed securities was strong, setting new records in many years. In 2004, issuance was at an all-time record of about $0.9 trillion.<sup id="cite_ref-sofabs_6-6" class="reference"><a href="#cite_note-sofabs-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup> </p><p>At the end of 2004, the larger sectors of this market were credit card-backed securities (21 percent), home-equity backed securities (25 percent), automobile-backed securities (13 percent), and <a href="/wiki/Collateralized_debt_obligation" title="Collateralized debt obligation">collateralized debt obligations</a> (15 percent). Among the other market segments were student loan-backed securities (6 percent), equipment leases (4 percent), manufactured housing (2 percent), small business loans (such as loans to convenience stores and gas stations), and aircraft leases.<sup id="cite_ref-sofabs_6-7" class="reference"><a href="#cite_note-sofabs-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup> </p><p>Modern securitization took off in the late 1990s or early 2000s, thanks to the innovative structures implemented across the asset classes, such as UK Mortgage Master Trusts (concept imported from the US Credit Cards), Insurance-backed transaction (such as those implemented by the insurance securitization guru Emmanuel Issanchou) or even more esoteric asset classes (for example securitization of lottery receivables). </p><p>As the result of the <a href="/wiki/Credit_crunch" title="Credit crunch">credit crunch</a> precipitated by the <a href="/wiki/Subprime_mortgage_crisis" title="Subprime mortgage crisis">subprime mortgage crisis</a> the US market for bonds backed by securitised loans was very weak in 2008 except for bonds guaranteed by a federally backed agency. As a result, interest rates rose for loans that were previously securitised such as <a href="/wiki/Mortgage_loan" class="mw-redirect" title="Mortgage loan">home mortgages</a>, <a href="/wiki/Student_loan" title="Student loan">student loans</a>, <a href="/wiki/Auto_loan" class="mw-redirect" title="Auto loan">auto loans</a> and <a href="/wiki/Commercial_mortgage" title="Commercial mortgage">commercial mortgages</a>.<sup id="cite_ref-19" class="reference"><a href="#cite_note-19"><span class="cite-bracket">[</span>19<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="Green_securitization_in_the_EU">Green securitization in the EU</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=19" title="Edit section: Green securitization in the EU"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>In recent years there has been a growing debate in the European Union on the merits of developing securitization for green lending assets, such as renovation loans, mortgages or loans for electric vehicles.<sup id="cite_ref-20" class="reference"><a href="#cite_note-20"><span class="cite-bracket">[</span>20<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-21" class="reference"><a href="#cite_note-21"><span class="cite-bracket">[</span>21<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="Recent_lawsuits">Recent lawsuits</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=20" title="Edit section: Recent lawsuits"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>Recently there have been several lawsuits attributable to the rating of securitizations by the three leading rating agencies. In July, 2009, the US's largest public pension fund has filed suit in California state court in connection with $1 billion (~$1.38 billion in 2023) in losses that it says were caused by "wildly inaccurate" credit ratings from the three leading ratings agencies.<sup id="cite_ref-22" class="reference"><a href="#cite_note-22"><span class="cite-bracket">[</span>22<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading2"><h2 id="See_also">See also</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=21" title="Edit section: See also"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <ul><li><a href="/wiki/Collateralized_debt_obligation" title="Collateralized debt obligation">Collateralized debt obligation</a>, securitization vehicle for corporate debt securities</li> <li><a href="/wiki/Collateralized_fund_obligation" title="Collateralized fund obligation">Collateralized fund obligation</a>, securitization vehicle for private equity and hedge fund assets</li> <li><a href="/wiki/Collateralized_mortgage_obligation" title="Collateralized mortgage obligation">Collateralized mortgage obligation</a>, securitization vehicle for mortgage-backed securities</li> <li><a href="/wiki/Collateralized_loan_obligation" title="Collateralized loan obligation">Collateralized loan obligation</a>, securitization vehicle for corporate loans</li> <li><a href="/wiki/Strip_financing" title="Strip financing">Strip financing</a></li></ul> <div class="mw-heading mw-heading2"><h2 id="References">References</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Securitization&action=edit&section=22" title="Edit section: References"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <style data-mw-deduplicate="TemplateStyles:r1239543626">.mw-parser-output .reflist{margin-bottom:0.5em;list-style-type:decimal}@media screen{.mw-parser-output .reflist{font-size:90%}}.mw-parser-output .reflist .references{font-size:100%;margin-bottom:0;list-style-type:inherit}.mw-parser-output .reflist-columns-2{column-width:30em}.mw-parser-output .reflist-columns-3{column-width:25em}.mw-parser-output .reflist-columns{margin-top:0.3em}.mw-parser-output .reflist-columns ol{margin-top:0}.mw-parser-output .reflist-columns li{page-break-inside:avoid;break-inside:avoid-column}.mw-parser-output .reflist-upper-alpha{list-style-type:upper-alpha}.mw-parser-output .reflist-upper-roman{list-style-type:upper-roman}.mw-parser-output .reflist-lower-alpha{list-style-type:lower-alpha}.mw-parser-output .reflist-lower-greek{list-style-type:lower-greek}.mw-parser-output .reflist-lower-roman{list-style-type:lower-roman}</style><div class="reflist reflist-columns references-column-width reflist-columns-2"> <ol class="references"> <li id="cite_note-1"><span class="mw-cite-backlink"><b><a href="#cite_ref-1">^</a></b></span> <span class="reference-text"><style data-mw-deduplicate="TemplateStyles:r1238218222">.mw-parser-output cite.citation{font-style:inherit;word-wrap:break-word}.mw-parser-output .citation q{quotes:"\"""\"""'""'"}.mw-parser-output .citation:target{background-color:rgba(0,127,255,0.133)}.mw-parser-output .id-lock-free.id-lock-free a{background:url("//upload.wikimedia.org/wikipedia/commons/6/65/Lock-green.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-limited.id-lock-limited a,.mw-parser-output .id-lock-registration.id-lock-registration a{background:url("//upload.wikimedia.org/wikipedia/commons/d/d6/Lock-gray-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-subscription.id-lock-subscription a{background:url("//upload.wikimedia.org/wikipedia/commons/a/aa/Lock-red-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .cs1-ws-icon a{background:url("//upload.wikimedia.org/wikipedia/commons/4/4c/Wikisource-logo.svg")right 0.1em center/12px no-repeat}body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-free a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-limited a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-registration a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-subscription a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .cs1-ws-icon a{background-size:contain;padding:0 1em 0 0}.mw-parser-output .cs1-code{color:inherit;background:inherit;border:none;padding:inherit}.mw-parser-output .cs1-hidden-error{display:none;color:var(--color-error,#d33)}.mw-parser-output .cs1-visible-error{color:var(--color-error,#d33)}.mw-parser-output .cs1-maint{display:none;color:#085;margin-left:0.3em}.mw-parser-output .cs1-kern-left{padding-left:0.2em}.mw-parser-output .cs1-kern-right{padding-right:0.2em}.mw-parser-output .citation .mw-selflink{font-weight:inherit}@media screen{.mw-parser-output .cs1-format{font-size:95%}html.skin-theme-clientpref-night .mw-parser-output .cs1-maint{color:#18911f}}@media screen and (prefers-color-scheme:dark){html.skin-theme-clientpref-os .mw-parser-output .cs1-maint{color:#18911f}}</style><cite class="citation web cs1"><a rel="nofollow" class="external text" href="https://www.britannica.com/money/securitization">"securitization | Definition & Facts Definition | Britannica Money"</a>. <i>www.britannica.com</i><span class="reference-accessdate">. Retrieved <span class="nowrap">2023-07-30</span></span>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Ajournal&rft.genre=unknown&rft.jtitle=www.britannica.com&rft.atitle=securitization+%7C+Definition+%26+Facts+Definition+%7C+Britannica+Money&rft_id=https%3A%2F%2Fwww.britannica.com%2Fmoney%2Fsecuritization&rfr_id=info%3Asid%2Fen.wikipedia.org%3ASecuritization" class="Z3988"></span></span> </li> <li id="cite_note-2"><span class="mw-cite-backlink"><b><a href="#cite_ref-2">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite id="CITEREFRaynesSylvainRutledge2003" class="citation book cs1">Raynes; Sylvain; Rutledge, Ann (2003). <i>The Analysis of Structured Securities</i>. Oxford University Press. p. 103. <a href="/wiki/ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <a href="/wiki/Special:BookSources/978-0-19-515273-9" title="Special:BookSources/978-0-19-515273-9"><bdi>978-0-19-515273-9</bdi></a>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Abook&rft.genre=book&rft.btitle=The+Analysis+of+Structured+Securities&rft.pages=103&rft.pub=Oxford+University+Press&rft.date=2003&rft.isbn=978-0-19-515273-9&rft.au=Raynes&rft.au=Sylvain&rft.au=Rutledge%2C+Ann&rfr_id=info%3Asid%2Fen.wikipedia.org%3ASecuritization" class="Z3988"></span></span> </li> <li id="cite_note-SIFMA-3"><span class="mw-cite-backlink"><b><a href="#cite_ref-SIFMA_3-0">^</a></b></span> <span class="reference-text">"ESF Securitization Data Report Q2:business</span> </li> <li id="cite_note-4"><span class="mw-cite-backlink"><b><a href="#cite_ref-4">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite id="CITEREFHill2002" class="citation journal cs1">Hill, Claire A. (2002). "Whole Business Securitization in Emerging Markets". <i>Duke Journal of Comparative and International Law</i>. <b>12</b> (2). <a href="/wiki/SSRN_(identifier)" class="mw-redirect" title="SSRN (identifier)">SSRN</a> <a rel="nofollow" class="external text" href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=333008">333008</a>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Ajournal&rft.genre=article&rft.jtitle=Duke+Journal+of+Comparative+and+International+Law&rft.atitle=Whole+Business+Securitization+in+Emerging+Markets&rft.volume=12&rft.issue=2&rft.date=2002&rft_id=https%3A%2F%2Fpapers.ssrn.com%2Fsol3%2Fpapers.cfm%3Fabstract_id%3D333008%23id-name%3DSSRN&rft.aulast=Hill&rft.aufirst=Claire+A.&rfr_id=info%3Asid%2Fen.wikipedia.org%3ASecuritization" class="Z3988"></span></span> </li> <li id="cite_note-fasb-5"><span class="mw-cite-backlink"><b><a href="#cite_ref-fasb_5-0">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite class="citation book cs1"><a rel="nofollow" class="external text" href="https://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1218220124871"><i>FASB Statement No. 140 "Accounting for transfers and servicing of financial assets and extinguishments of liabilities—a replacement of FASB Statement No. 125"</i></a>. Financial Accounting Standards Board. September 2000.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Abook&rft.genre=book&rft.btitle=FASB+Statement+No.+140+%22Accounting+for+transfers+and+servicing+of+financial+assets+and+extinguishments+of+liabilities%E2%80%94a+replacement+of+FASB+Statement+No.+125%22&rft.pub=Financial+Accounting+Standards+Board&rft.date=2000-09&rft_id=https%3A%2F%2Fwww.fasb.org%2Fjsp%2FFASB%2FDocument_C%2FDocumentPage%3Fcid%3D1218220124871&rfr_id=info%3Asid%2Fen.wikipedia.org%3ASecuritization" class="Z3988"></span></span> </li> <li id="cite_note-sofabs-6"><span class="mw-cite-backlink">^ <a href="#cite_ref-sofabs_6-0"><sup><i><b>a</b></i></sup></a> <a href="#cite_ref-sofabs_6-1"><sup><i><b>b</b></i></sup></a> <a href="#cite_ref-sofabs_6-2"><sup><i><b>c</b></i></sup></a> <a href="#cite_ref-sofabs_6-3"><sup><i><b>d</b></i></sup></a> <a href="#cite_ref-sofabs_6-4"><sup><i><b>e</b></i></sup></a> <a href="#cite_ref-sofabs_6-5"><sup><i><b>f</b></i></sup></a> <a href="#cite_ref-sofabs_6-6"><sup><i><b>g</b></i></sup></a> <a href="#cite_ref-sofabs_6-7"><sup><i><b>h</b></i></sup></a></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite id="CITEREFSabarwal2005" class="citation journal cs1">Sabarwal, T. (29 December 2005). 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Jacques Delors Centre.</span> </li> <li id="cite_note-21"><span class="mw-cite-backlink"><b><a href="#cite_ref-21">^</a></b></span> <span class="reference-text">EBA (2022) <i><a rel="nofollow" class="external text" href="https://www.eba.europa.eu/sites/default/files/document_library/Publications/Reports/2022/1027593/EBA%20report%20on%20sustainable%20securitisation.pdf.">Developping a framework for sustainable securitisation</a></i>. EBA/REP/2022/06. 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title="Orphan structure">Orphan structure</a></li> <li><a href="/wiki/Shell_corporation" title="Shell corporation">Shell company</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Types of securities</th><td class="navbox-list-with-group navbox-list navbox-even hlist" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Asset-backed_security" title="Asset-backed security">Asset-backed security</a> (ABS)</li> <li><a href="/wiki/Mortgage-backed_security" title="Mortgage-backed security">Mortgage-backed security</a> (MBS)</li> <li><a href="/wiki/Credit_derivative" title="Credit derivative">Credit derivative</a></li> <li><a href="/wiki/Credit_default_swap" title="Credit default swap">Credit default swap</a> (CDS)</li> <li><a href="/wiki/Collateralized_debt_obligation" title="Collateralized debt obligation">Collateralized debt obligation</a> (CDO)</li> <li><a href="/wiki/Collateralized_mortgage_obligation" title="Collateralized mortgage obligation">Collateralized mortgage obligation</a> (CMO)</li> <li><a href="/w/index.php?title=Collateralized_bond_obligation&action=edit&redlink=1" class="new" title="Collateralized bond obligation (page does not exist)">Collateralized bond obligation</a> (CBO)</li> <li><a href="/wiki/Collateralized_loan_obligation" title="Collateralized loan obligation">Collateralized loan obligation</a> (CLO)</li> <li><a href="/wiki/Collateralized_fund_obligation" title="Collateralized fund obligation">Collateralized fund obligation</a> (CFO)</li> <li><a href="/wiki/Senior_stretch_loan" title="Senior stretch loan">Senior stretch loan</a></li> <li><a href="/wiki/Structured_product" title="Structured product">Structured product</a></li></ul> </div></td></tr></tbody></table></div> <div class="navbox-styles"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1129693374"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1236075235"></div><div role="navigation" class="navbox" aria-labelledby="Hedge_funds642" style="padding:3px"><table class="nowraplinks hlist mw-collapsible autocollapse navbox-inner" style="border-spacing:0;background:transparent;color:inherit"><tbody><tr><th scope="col" class="navbox-title" colspan="3"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1129693374"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1239400231"><div class="navbar plainlinks hlist navbar-mini"><ul><li class="nv-view"><a href="/wiki/Template:Hedge_funds" title="Template:Hedge funds"><abbr title="View this template">v</abbr></a></li><li class="nv-talk"><a href="/wiki/Template_talk:Hedge_funds" title="Template talk:Hedge funds"><abbr title="Discuss this template">t</abbr></a></li><li class="nv-edit"><a href="/wiki/Special:EditPage/Template:Hedge_funds" title="Special:EditPage/Template:Hedge funds"><abbr title="Edit this template">e</abbr></a></li></ul></div><div id="Hedge_funds642" style="font-size:114%;margin:0 4em"><a href="/wiki/Hedge_fund" title="Hedge fund">Hedge funds</a></div></th></tr><tr><th scope="row" class="navbox-group" style="width:1%">Investment<br />strategy</th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"></div><table class="nowraplinks navbox-subgroup" style="border-spacing:0"><tbody><tr><th scope="row" class="navbox-group" style="width:7em"><a href="/wiki/Arbitrage" title="Arbitrage">Arbitrage</a> /<br /><a href="/wiki/Relative_value_(economics)" title="Relative value (economics)">relative value</a></th><td class="navbox-list-with-group navbox-list navbox-odd" style="padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Capital_structure#Arbitrage" title="Capital structure">Capital structure arbitrage</a></li> <li><a href="/wiki/Convertible_arbitrage" title="Convertible arbitrage">Convertible arbitrage</a></li> <li><a href="/wiki/Market_neutral#Equity-market-neutral" title="Market neutral">Equity market neutral</a></li> <li><a href="/wiki/Fixed_income_arbitrage" title="Fixed income arbitrage">Fixed income arbitrage</a> / <a href="/wiki/Fixed-income_relative-value_investing" title="Fixed-income relative-value investing">fixed-income relative-value investing</a></li> <li><a href="/wiki/Statistical_arbitrage" title="Statistical arbitrage">Statistical arbitrage</a></li> <li><a href="/wiki/Volatility_arbitrage" title="Volatility arbitrage">Volatility arbitrage</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:7em"><a href="/wiki/Event-driven_investing" title="Event-driven investing">Event-driven</a></th><td class="navbox-list-with-group navbox-list navbox-even" style="padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Shareholder_activism" title="Shareholder activism">Shareholder activism</a></li> <li><a href="/wiki/Distressed_securities" title="Distressed securities">Distressed securities</a></li> <li><a href="/wiki/Risk_arbitrage" title="Risk arbitrage">Risk arbitrage</a></li> <li><a href="/wiki/Special_situation" title="Special situation">Special situation</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:7em">Directional</th><td class="navbox-list-with-group navbox-list navbox-odd" style="padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Convergence_trade" title="Convergence trade">Convergence trade</a></li> <li><a href="/wiki/Commodity_trading_advisor" title="Commodity trading advisor">Commodity trading advisors</a> / <a href="/wiki/Managed_futures_account" title="Managed futures account">managed futures account</a></li> <li><a href="/wiki/Short_(finance)" title="Short (finance)">Dedicated short</a></li> <li><a href="/wiki/Global_macro" title="Global macro">Global macro</a></li> <li><a href="/wiki/Long/short_equity" title="Long/short equity">Long/short equity</a></li> <li><a href="/wiki/Trend_following" title="Trend following">Trend following</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:7em">Other</th><td class="navbox-list-with-group navbox-list navbox-even" style="padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Fund_of_funds#Fund_of_hedge_funds" title="Fund of funds">Fund of hedge funds</a> / <a href="/wiki/Multi-manager_investment" title="Multi-manager investment">Multi-manager</a></li></ul> </div></td></tr></tbody></table><div></div></td><td class="noviewer navbox-image" rowspan="5" style="width:1px;padding:0 0 0 2px"><div><span typeof="mw:File"><a href="/wiki/File:Chicklet-currency.jpg" class="mw-file-description"><img src="//upload.wikimedia.org/wikipedia/commons/thumb/9/9f/Chicklet-currency.jpg/60px-Chicklet-currency.jpg" decoding="async" width="60" height="54" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/commons/thumb/9/9f/Chicklet-currency.jpg/90px-Chicklet-currency.jpg 1.5x, //upload.wikimedia.org/wikipedia/commons/thumb/9/9f/Chicklet-currency.jpg/120px-Chicklet-currency.jpg 2x" data-file-width="279" data-file-height="250" /></a></span></div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Trading</th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Algorithmic_trading" title="Algorithmic trading">Algorithmic trading</a></li> <li><a href="/wiki/Day_trading" title="Day trading">Day trading</a></li> <li><a href="/wiki/High-frequency_trading" title="High-frequency trading">High-frequency trading</a></li> <li><a href="/wiki/Prime_brokerage" title="Prime brokerage">Prime brokerage</a></li> <li><a href="/wiki/Program_trading" title="Program trading">Program trading</a></li> <li><a href="/wiki/Proprietary_trading" title="Proprietary trading">Proprietary trading</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Related<br />terms</th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"></div><table class="nowraplinks navbox-subgroup" style="border-spacing:0"><tbody><tr><th scope="row" class="navbox-group" style="width:7em">Markets</th><td class="navbox-list-with-group navbox-list navbox-even" style="padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Commodity_market" title="Commodity market">Commodities</a></li> <li><a href="/wiki/Derivative_(finance)" title="Derivative (finance)">Derivatives</a></li> <li><a href="/wiki/Stock_market" title="Stock market">Equity</a></li> <li><a href="/wiki/Bond_market" title="Bond market">Fixed income</a></li> <li><a href="/wiki/Foreign_exchange_market" title="Foreign exchange market">Foreign exchange</a></li> <li><a href="/wiki/Money_market" title="Money market">Money markets</a></li> <li><a href="/wiki/Structured_finance" title="Structured finance">Structured securities</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:7em">Misc</th><td class="navbox-list-with-group navbox-list navbox-odd" style="padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Absolute_return" title="Absolute return">Absolute return</a></li> <li><a href="/wiki/Arbitrage_pricing_theory" title="Arbitrage pricing theory">Arbitrage pricing theory</a></li> <li><a href="/wiki/Assets_under_management" title="Assets under management">Assets under management</a></li> <li><a href="/wiki/Black%E2%80%93Scholes_model" title="Black–Scholes model">Black–Scholes model</a> (<a href="/wiki/Greeks_(finance)" title="Greeks (finance)">Greeks</a>: <a href="/wiki/Delta_neutral" title="Delta neutral">delta neutral</a>)</li> <li><a href="/wiki/Capital_asset_pricing_model" title="Capital asset pricing model">Capital asset pricing model</a> (<a href="/wiki/Alpha_(finance)" title="Alpha (finance)">alpha</a> / <a href="/wiki/Beta_(finance)" title="Beta (finance)">beta</a> / <a href="/wiki/Security_characteristic_line" title="Security characteristic line">security characteristic line</a>)</li> <li><a href="/wiki/Fundamental_analysis" title="Fundamental analysis">Fundamental analysis</a></li> <li><a href="/wiki/Hedge_(finance)" title="Hedge (finance)">Hedge</a></li> <li><a class="mw-selflink selflink">Securitization</a></li> <li><a href="/wiki/Short_(finance)" title="Short (finance)">Short</a></li> <li><a href="/wiki/Taxation_of_private_equity_and_hedge_funds" title="Taxation of private equity and hedge funds">Taxation of private equity and hedge funds</a></li> <li><a href="/wiki/Technical_analysis" title="Technical analysis">Technical analysis</a></li></ul> </div></td></tr></tbody></table><div></div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Investors</th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Vulture_fund" title="Vulture fund">Vulture funds</a></li> <li><a href="/wiki/Family_office" title="Family office">Family offices</a></li> <li><a href="/wiki/Financial_endowment" title="Financial endowment">Financial endowments</a></li> <li><a href="/wiki/Fund_of_funds#Fund_of_hedge_funds" title="Fund of funds">Fund of hedge funds</a></li> <li><a href="/wiki/High-net-worth_individual" title="High-net-worth individual">High-net-worth individual</a></li> <li><a href="/wiki/Institutional_investor" title="Institutional investor">Institutional investors</a></li> <li><a href="/wiki/Insurance#Insurance_companies" title="Insurance">Insurance companies</a></li> <li><a href="/wiki/Investment_banking" title="Investment banking">Investment banks</a></li> <li><a href="/wiki/Merchant_bank" title="Merchant bank">Merchant banks</a></li> <li><a href="/wiki/Pension_fund" title="Pension fund">Pension funds</a></li> <li><a href="/wiki/Sovereign_wealth_fund" title="Sovereign wealth fund">Sovereign wealth funds</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Governance</th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Fund_governance" title="Fund governance">Fund governance</a></li> <li><a href="/wiki/Standards_Board_for_Alternative_Investments" title="Standards Board for Alternative Investments">Standards Board for Alternative Investments</a></li> <li><a href="/wiki/Managed_Funds_Association" title="Managed Funds Association">Managed Funds Association</a></li></ul> </div></td></tr><tr><td class="navbox-abovebelow" colspan="3"><div> <ul><li><span class="noviewer" typeof="mw:File"><span title="Category"><img alt="" src="//upload.wikimedia.org/wikipedia/en/thumb/9/96/Symbol_category_class.svg/16px-Symbol_category_class.svg.png" decoding="async" width="16" height="16" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/en/thumb/9/96/Symbol_category_class.svg/23px-Symbol_category_class.svg.png 1.5x, //upload.wikimedia.org/wikipedia/en/thumb/9/96/Symbol_category_class.svg/31px-Symbol_category_class.svg.png 2x" data-file-width="180" data-file-height="185" /></span></span><a href="/wiki/Category:Alternative_investment_management_companies" title="Category:Alternative investment management companies">Alternative investment management companies</a></li> <li><span class="noviewer" typeof="mw:File"><span title="Category"><img alt="" src="//upload.wikimedia.org/wikipedia/en/thumb/9/96/Symbol_category_class.svg/16px-Symbol_category_class.svg.png" decoding="async" width="16" height="16" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/en/thumb/9/96/Symbol_category_class.svg/23px-Symbol_category_class.svg.png 1.5x, //upload.wikimedia.org/wikipedia/en/thumb/9/96/Symbol_category_class.svg/31px-Symbol_category_class.svg.png 2x" data-file-width="180" data-file-height="185" /></span></span> <a href="/wiki/Category:Hedge_funds" title="Category:Hedge funds">Hedge funds</a></li> <li><span class="noviewer" typeof="mw:File"><span title="Category"><img alt="" src="//upload.wikimedia.org/wikipedia/en/thumb/9/96/Symbol_category_class.svg/16px-Symbol_category_class.svg.png" decoding="async" width="16" height="16" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/en/thumb/9/96/Symbol_category_class.svg/23px-Symbol_category_class.svg.png 1.5x, //upload.wikimedia.org/wikipedia/en/thumb/9/96/Symbol_category_class.svg/31px-Symbol_category_class.svg.png 2x" data-file-width="180" data-file-height="185" /></span></span><a href="/wiki/Category:Hedge_fund_managers" title="Category:Hedge fund managers">Hedge fund managers</a></li> <li><span class="noviewer" typeof="mw:File"><span title="List-Class article"><img alt="" src="//upload.wikimedia.org/wikipedia/en/thumb/d/db/Symbol_list_class.svg/16px-Symbol_list_class.svg.png" decoding="async" width="16" height="16" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/en/thumb/d/db/Symbol_list_class.svg/23px-Symbol_list_class.svg.png 1.5x, //upload.wikimedia.org/wikipedia/en/thumb/d/db/Symbol_list_class.svg/31px-Symbol_list_class.svg.png 2x" data-file-width="180" data-file-height="185" /></span></span> <a href="/wiki/List_of_hedge_funds" title="List of hedge funds">List of hedge funds</a></li></ul> </div></td></tr></tbody></table></div> <div class="navbox-styles"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1129693374"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1236075235"></div><div role="navigation" class="navbox" aria-labelledby="Financial_risk_and_financial_risk_management192" style="padding:3px"><table class="nowraplinks hlist mw-collapsible autocollapse navbox-inner" style="border-spacing:0;background:transparent;color:inherit"><tbody><tr><th scope="col" class="navbox-title" colspan="2"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1129693374"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1239400231"><div class="navbar plainlinks hlist navbar-mini"><ul><li class="nv-view"><a href="/wiki/Template:Financial_risk" title="Template:Financial risk"><abbr title="View this template">v</abbr></a></li><li class="nv-talk"><a href="/wiki/Template_talk:Financial_risk" title="Template talk:Financial risk"><abbr title="Discuss this template">t</abbr></a></li><li class="nv-edit"><a href="/wiki/Special:EditPage/Template:Financial_risk" title="Special:EditPage/Template:Financial risk"><abbr title="Edit this template">e</abbr></a></li></ul></div><div id="Financial_risk_and_financial_risk_management192" style="font-size:114%;margin:0 4em"><a href="/wiki/Financial_risk" title="Financial risk">Financial risk</a> and <a href="/wiki/Financial_risk_management" title="Financial risk management">financial risk management</a></div></th></tr><tr><th scope="row" class="navbox-group" style="width:1%">Categories</th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"></div><table class="nowraplinks navbox-subgroup" style="border-spacing:0"><tbody><tr><th scope="row" class="navbox-group" style="width:1%"><a href="/wiki/Credit_risk" title="Credit risk">Credit risk</a></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Consumer_credit_risk" title="Consumer credit risk">Consumer credit risk</a></li> <li><a href="/wiki/Sovereign_credit_risk" title="Sovereign credit risk">Sovereign credit risk</a></li> <li><a href="/wiki/Settlement_risk" title="Settlement risk">Settlement risk</a></li> <li><a href="/wiki/Default_(finance)" title="Default (finance)">Default risk</a></li> <li><a href="/wiki/Concentration_risk" title="Concentration risk">Concentration risk</a></li> <li><a href="/wiki/Credit_derivative" title="Credit derivative">Credit derivative</a></li> <li><a class="mw-selflink selflink">Securitization</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="/wiki/Market_risk" title="Market risk">Market risk</a></th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Commodity_risk" title="Commodity risk">Commodity risk</a> (e.g. <a href="/wiki/Volume_risk" title="Volume risk">Volume risk</a>, <a href="/wiki/Basis_risk" title="Basis risk">Basis risk</a>, <a href="/wiki/Shape_risk" title="Shape risk">Shape risk</a>, <a href="/wiki/Holding_period_risk" title="Holding period risk">Holding period risk</a>, <a href="/wiki/Price_area_risk" class="mw-redirect" title="Price area risk">Price area risk</a>)</li> <li><a href="/wiki/Equity_risk" title="Equity risk">Equity risk</a></li> <li><a href="/wiki/Valuation_risk" title="Valuation risk">Valuation risk</a></li> <li><a href="/wiki/Foreign_exchange_risk" title="Foreign exchange risk">FX risk</a></li> <li><a href="/wiki/Margining_risk" title="Margining risk">Margining risk</a></li> <li><a href="/wiki/Interest_rate_risk" title="Interest rate risk">Interest rate risk</a></li> <li><a href="/wiki/Inflation_risk" class="mw-redirect" title="Inflation risk">Inflation risk</a></li> <li><a href="/wiki/Volatility_risk" title="Volatility risk">Volatility risk</a></li> <li><a href="/wiki/Liquidity_risk" title="Liquidity risk">Liquidity risk</a> (e.g. <a href="/wiki/Refinancing_risk" title="Refinancing risk">Refinancing risk</a>, <a href="/wiki/Deposit_risk" title="Deposit risk">Deposit risk</a>)</li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="/wiki/Operational_risk" title="Operational risk">Operational risk</a></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Operational_risk_management" title="Operational risk management">Operational risk management</a></li> <li><a href="/wiki/Business_risk" class="mw-redirect" title="Business risk">Business risk</a></li> <li><a href="/wiki/Model_risk" title="Model risk">Model risk</a></li> <li><a href="/wiki/Reputational_risk" class="mw-redirect" title="Reputational risk">Reputational risk</a></li> <li><a href="/wiki/Country_risk" title="Country risk">Country risk</a></li> <li><a href="/wiki/Political_risk" title="Political risk">Political risk</a></li> <li><a href="/wiki/Legal_risk" title="Legal risk">Legal risk</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Other</th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Execution_risk" class="mw-redirect" title="Execution risk">Execution risk</a></li> <li><a href="/wiki/Profit_risk" title="Profit risk">Profit risk</a></li> <li><a href="/wiki/Systemic_risk" title="Systemic risk">Systemic risk</a></li> <li><a href="/wiki/Non-financial_risk" title="Non-financial risk">Non-financial risk</a></li></ul> </div></td></tr></tbody></table><div></div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="/wiki/Financial_risk_modeling" title="Financial risk modeling">Modeling</a></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Arbitrage_pricing_theory" title="Arbitrage pricing theory">Arbitrage pricing theory</a></li> <li><a href="/wiki/Black%E2%80%93Scholes_model" title="Black–Scholes model">Black–Scholes model</a></li> <li><a href="/wiki/Replicating_portfolio" title="Replicating portfolio">Replicating portfolio</a></li> <li><a href="/wiki/Cashflow_matching" title="Cashflow matching">Cash flow matching</a></li> <li><a href="/wiki/Expected_shortfall" title="Expected shortfall">Conditional Value-at-Risk (CVaR)</a></li> <li><a href="/wiki/Copula_(probability_theory)" class="mw-redirect" title="Copula (probability theory)">Copula</a></li> <li><a href="/wiki/Drawdown_(economics)" title="Drawdown (economics)">Drawdown</a></li> <li><a href="/wiki/First-hitting-time_model" title="First-hitting-time model">First-hitting-time model</a></li> <li><a href="/wiki/Immunization_(finance)" title="Immunization (finance)">Interest rate immunization</a></li> <li><a href="/wiki/Market_portfolio" title="Market portfolio">Market portfolio</a></li> <li><a href="/wiki/Modern_portfolio_theory" title="Modern portfolio theory">Modern portfolio theory</a></li> <li><a href="/wiki/Omega_ratio" title="Omega ratio">Omega ratio</a></li> <li><a href="/wiki/Risk-adjusted_return_on_capital" title="Risk-adjusted return on capital">RAROC</a></li> <li><a href="/wiki/Risk-free_interest_rate" class="mw-redirect" title="Risk-free interest rate">Risk-free rate</a></li> <li><a href="/wiki/Risk_parity" title="Risk parity">Risk parity</a></li> <li><a href="/wiki/Sharpe_ratio" title="Sharpe ratio">Sharpe ratio</a></li> <li><a href="/wiki/Sortino_ratio" title="Sortino ratio">Sortino ratio</a></li> <li><a href="/wiki/Survival_analysis" title="Survival analysis">Survival analysis</a> (<a href="/wiki/Proportional_hazards_model" title="Proportional hazards model">Proportional hazards model</a>)</li> <li><a href="/wiki/Tracking_error" title="Tracking error">Tracking error</a></li> <li><a href="/wiki/Value_at_risk" title="Value at risk">Value-at-Risk (VaR)</a> and extensions (<a href="/wiki/Profit_at_risk" title="Profit at risk">Profit at risk</a>, <a href="/wiki/Margin_at_risk" title="Margin at risk">Margin at risk</a>, <a href="/wiki/Liquidity_at_risk" title="Liquidity at risk">Liquidity at risk</a>, <a href="/wiki/Cash_flow_at_risk" class="mw-redirect" title="Cash flow at risk">Cash flow at risk</a>, <a href="/wiki/Earnings_at_risk" title="Earnings at risk">Earnings at risk</a>)</li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Basic concepts</th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Asset_allocation" title="Asset allocation">Asset allocation</a></li> <li><a href="/wiki/Asset_and_liability_management" title="Asset and liability management">Asset and liability management</a></li> <li><a href="/wiki/Asset_pricing" title="Asset pricing">Asset pricing</a></li> <li><a href="/wiki/Bad_debt" title="Bad debt">Bad debt</a></li> <li><a href="/wiki/Capital_asset" title="Capital asset">Capital asset</a></li> <li><a href="/wiki/Capital_structure" title="Capital structure">Capital structure</a></li> <li><a href="/wiki/Corporate_finance" title="Corporate finance">Corporate finance</a></li> <li><a href="/wiki/Cost_of_capital" title="Cost of capital">Cost of capital</a></li> <li><a href="/wiki/Diversification_(finance)" title="Diversification (finance)">Diversification</a></li> <li><a href="/wiki/Economic_bubble" title="Economic bubble">Economic bubble</a></li> <li><a href="/wiki/Enterprise_value" title="Enterprise value">Enterprise value</a></li> <li><a href="/wiki/Environmental,_social,_and_governance" title="Environmental, social, and governance">ESG</a></li> <li><a href="/wiki/Exchange_traded_fund" class="mw-redirect" title="Exchange traded fund">Exchange traded fund</a></li> <li><a href="/wiki/Expected_return" title="Expected return">Expected return</a></li> <li><a href="/wiki/Finance" title="Finance">Financial</a> <ul><li><a href="/wiki/Financial_adviser" title="Financial adviser">adviser</a></li> <li><a href="/wiki/Financial_analysis" title="Financial analysis">analysis</a></li> <li><a href="/wiki/Financial_analyst" title="Financial analyst">analyst</a></li> <li><a href="/wiki/Financial_asset" title="Financial asset">asset</a></li> <li><a href="/wiki/Financial_betting" title="Financial betting">betting</a></li> <li><a href="/wiki/Financial_crime" title="Financial crime">crime</a></li> <li><a href="/wiki/Financial_engineering" title="Financial engineering">engineering</a></li> <li><a href="/wiki/Financial_law" title="Financial law">law</a></li> <li><a href="/wiki/Financial_risk" title="Financial risk">risk</a></li> <li><a href="/wiki/Financial_social_work" title="Financial social work">social work</a></li></ul></li> <li><a href="/wiki/Fundamental_analysis" title="Fundamental analysis">Fundamental analysis</a></li> <li><a href="/wiki/Growth_investing" title="Growth investing">Growth investing</a></li> <li><a href="/wiki/Hazard" title="Hazard">Hazard</a></li> <li><a href="/wiki/Hedge_(finance)" title="Hedge (finance)">Hedge</a></li> <li><a href="/wiki/Investment_management" title="Investment management">Investment management</a></li> <li><a href="/wiki/Risk" title="Risk">Risk</a></li> <li><a href="/wiki/Risk_pool" title="Risk pool">Risk pool</a></li> <li><a href="/wiki/Risk_of_ruin" title="Risk of ruin">Risk of ruin</a></li> <li><a href="/wiki/Systematic_risk" title="Systematic risk">Systematic risk</a></li> <li><a href="/wiki/Mathematical_finance" title="Mathematical finance">Mathematical finance</a></li> <li><a href="/wiki/Moral_hazard" title="Moral hazard">Moral hazard</a></li> <li><a href="/wiki/Risk-return_spectrum" class="mw-redirect" title="Risk-return spectrum">Risk-return spectrum</a></li> <li><a href="/wiki/Speculation" title="Speculation">Speculation</a></li> <li><a href="/wiki/Speculative_attack" title="Speculative attack">Speculative attack</a></li> <li><a href="/wiki/Statistical_finance" title="Statistical finance">Statistical finance</a></li> <li><a href="/wiki/Strategic_financial_management" title="Strategic financial management">Strategic financial management</a></li> <li><a href="/wiki/Stress_test_(financial)" title="Stress test (financial)">Stress test (financial)</a></li> <li><a href="/wiki/Structured_finance" title="Structured finance">Structured finance</a></li> <li><a href="/wiki/Structured_product" title="Structured product">Structured product</a></li> <li><a href="/wiki/Systemic_risk" title="Systemic risk">Systemic risk</a></li> <li><a href="/wiki/Toxic_asset" title="Toxic asset">Toxic asset</a></li></ul> </div></td></tr><tr><td class="navbox-abovebelow" colspan="2"><div> <ul><li><a href="/wiki/Financial_economics" title="Financial economics">Financial economics</a></li> <li><a href="/wiki/Investment_management" title="Investment management">Investment management</a></li> <li><a href="/wiki/Mathematical_finance" title="Mathematical finance">Mathematical finance</a></li></ul> </div></td></tr></tbody></table></div> <div class="navbox-styles"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1129693374"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1236075235"></div><div role="navigation" class="navbox" aria-labelledby="Real_estate571" style="padding:3px"><table class="nowraplinks hlist mw-collapsible mw-collapsed navbox-inner" style="border-spacing:0;background:transparent;color:inherit"><tbody><tr><th scope="col" class="navbox-title" colspan="2"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1129693374"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1239400231"><div class="navbar plainlinks hlist navbar-mini"><ul><li class="nv-view"><a href="/wiki/Template:Real_estate" title="Template:Real estate"><abbr title="View this template">v</abbr></a></li><li class="nv-talk"><a href="/wiki/Template_talk:Real_estate" title="Template talk:Real estate"><abbr title="Discuss this template">t</abbr></a></li><li class="nv-edit"><a href="/wiki/Special:EditPage/Template:Real_estate" title="Special:EditPage/Template:Real estate"><abbr title="Edit this template">e</abbr></a></li></ul></div><div id="Real_estate571" style="font-size:114%;margin:0 4em"><a href="/wiki/Real_estate" title="Real estate">Real estate</a></div></th></tr><tr><td class="navbox-abovebelow" colspan="2"><div> <ul><li><a href="/wiki/Property" title="Property">Property</a></li> <li><a href="/wiki/Tertiary_sector_of_the_economy" title="Tertiary sector of the economy">Tertiary sector of the economy</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">By location</th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Real_estate_in_Bangladesh" title="Real estate in Bangladesh">Bangladesh</a></li> <li><a href="/wiki/Real_estate_in_Canada" class="mw-redirect" title="Real estate in Canada">Canada</a></li> <li><a href="/wiki/Real_estate_in_China" title="Real estate in China">China</a></li> <li><a href="/wiki/Real_estate_in_Indonesia" class="mw-redirect" title="Real estate in Indonesia">Indonesia</a></li> <li><a href="/wiki/Real_estate_in_Italy" title="Real estate in Italy">Italy</a></li> <li><a href="/wiki/Real_estate_in_Turkey" class="mw-redirect" title="Real estate in Turkey">Turkey</a></li> <li><a href="/wiki/Real_estate_in_Kenya" title="Real estate in Kenya">Kenya</a></li> <li><a href="/wiki/Real_estate_in_Pakistan" title="Real estate in Pakistan">Pakistan</a></li> <li><a href="/wiki/Real_estate_in_Panama" title="Real estate in Panama">Panama</a></li> <li><a href="/wiki/Real_estate_in_Puerto_Rico" title="Real estate in Puerto Rico">Puerto Rico</a></li> <li><a href="/wiki/Real_estate_in_Russia" class="mw-redirect" title="Real estate in Russia">Russia</a></li> <li><a href="/wiki/Real_estate_in_Saudi_Arabia" class="mw-redirect" title="Real estate in Saudi Arabia">Saudi Arabia</a></li> <li><a href="/wiki/Real_estate_in_the_United_Arab_Emirates" class="mw-redirect" title="Real estate in the United Arab Emirates">United Arab Emirates</a></li> <li><a href="/wiki/Real_estate_in_the_United_Kingdom" title="Real estate in the United Kingdom">United Kingdom</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Types</th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Commercial_property" title="Commercial property">Commercial property</a> <ul><li><a href="/wiki/Commercial_building" class="mw-redirect" title="Commercial building">Commercial building</a></li></ul></li> <li><a href="/wiki/Corporate_Real_Estate" class="mw-redirect" title="Corporate Real Estate">Corporate Real Estate</a></li> <li><a href="/wiki/Extraterrestrial_real_estate" title="Extraterrestrial real estate">Extraterrestrial real estate</a></li> <li><a href="/wiki/International_real_estate" title="International real estate">International real estate</a></li> <li><a href="/wiki/Lease_administration" title="Lease administration">Lease administration</a></li> <li><a href="/wiki/Niche_real_estate" title="Niche real estate">Niche real estate</a> <ul><li><a href="/wiki/Garden_real_estate" class="mw-redirect" title="Garden real estate">Garden real estate</a></li> <li><a href="/wiki/Healthcare_real_estate" title="Healthcare real estate">Healthcare real estate</a></li> <li><a href="/wiki/Vacation_property" class="mw-redirect" title="Vacation property">Vacation property</a></li> <li><a href="/wiki/Arable_land" title="Arable land">Arable land</a></li> <li><a href="/wiki/Golf_property" title="Golf property">Golf property</a></li> <li><a href="/wiki/Luxury_real_estate" class="mw-redirect" title="Luxury real estate">Luxury real estate</a></li></ul></li> <li><a href="/wiki/Off-plan_property" title="Off-plan property">Off-plan property</a></li> <li><a href="/wiki/Private_equity_real_estate" title="Private equity real estate">Private equity real estate</a></li> <li><a href="/wiki/Real_estate_owned" title="Real estate owned">Real estate owned</a></li> <li><a href="/wiki/Residential_property" class="mw-redirect" title="Residential property">Residential property</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Sectors</th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Property_management" title="Property management">Property management</a></li> <li><a href="/wiki/Real_estate_development" title="Real estate development">Real estate development</a></li> <li><a href="/wiki/Real_estate_investing" title="Real estate investing">Real estate investing</a></li> <li><a href="/wiki/Flipping" title="Flipping">Real estate flipping</a></li> <li><a href="/wiki/Relocation_service" title="Relocation service">Relocation</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="/wiki/Property_law" title="Property law">Law</a> and regulation</th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Adverse_possession" title="Adverse possession">Adverse possession</a></li> <li><a href="/wiki/Chain_of_title" title="Chain of title">Chain of title</a></li> <li><a href="/wiki/Closing_(real_estate)" title="Closing (real estate)">Closing</a></li> <li><a href="/wiki/Concurrent_estate" title="Concurrent estate">Concurrent estate</a></li> <li><a href="/wiki/Conditional_sale" title="Conditional sale">Conditional sale</a></li> <li><a href="/wiki/Conveyancing" title="Conveyancing">Conveyancing</a></li> <li><a href="/wiki/Deed" title="Deed">Deed</a></li> <li><a href="/wiki/Eminent_domain" title="Eminent domain">Eminent domain</a></li> <li><a href="/wiki/Encumbrance" title="Encumbrance">Encumbrance</a></li> <li><a href="/wiki/Foreclosure" title="Foreclosure">Foreclosure</a></li> <li><a href="/wiki/Land_law" title="Land law">Land law</a></li> <li><a href="/wiki/Land_registration" title="Land registration">Land registration</a></li> <li><a href="/wiki/Leasehold_estate" title="Leasehold estate">Leasehold estate</a> <ul><li><a href="/wiki/Lease" title="Lease">Lease</a></li></ul></li> <li><a href="/wiki/Property_abstract" title="Property abstract">Property abstract</a></li> <li><a href="/wiki/Real_estate_transaction" title="Real estate transaction">Real estate transaction</a> <ul><li><a href="/wiki/Real_estate_contract" title="Real estate contract">Real estate contract</a></li></ul></li> <li><a href="/wiki/Real_property" title="Real property">Real property</a></li> <li><a href="/wiki/Rent_regulation" title="Rent regulation">Rent regulation</a></li> <li><a href="/wiki/Severance_(land)" title="Severance (land)">Severance</a></li> <li><a href="/wiki/Torrens_title" title="Torrens title">Torrens title</a></li> <li><a href="/wiki/Zoning" title="Zoning">Zoning</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Economics, financing<br />and valuation</th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Asset-based_lending" title="Asset-based lending">Asset-based lending</a></li> <li><a href="/wiki/Capitalization_rate" title="Capitalization rate">Capitalization rate</a></li> <li><a href="/wiki/Effective_gross_income" title="Effective gross income">Effective gross income</a></li> <li><a href="/wiki/Gross_rent_multiplier" title="Gross rent multiplier">Gross rent multiplier</a></li> <li><a href="/wiki/Hard_money_loan" title="Hard money loan">Hard money loan</a></li> <li><a href="/wiki/Highest_and_best_use" title="Highest and best use">Highest and best use</a></li> <li><a href="/wiki/Home_equity_loan" title="Home equity loan">Home equity loan</a></li> <li><a href="/wiki/Investment_rating_for_real_estate" title="Investment rating for real estate">Investment rating for real estate</a></li> <li><a href="/wiki/Mortgage_insurance" title="Mortgage insurance">Mortgage insurance</a></li> <li><a href="/wiki/Mortgage_loan" class="mw-redirect" title="Mortgage loan">Mortgage loan</a></li> <li><a href="/wiki/Real_estate_derivative" title="Real estate derivative">Real estate derivative</a></li> <li><a href="/wiki/Real_estate_economics" title="Real estate economics">Real estate economics</a></li> <li><a href="/wiki/Real_estate_bubble" class="mw-redirect" title="Real estate bubble">Real estate bubble</a></li> <li><a href="/wiki/Real_estate_valuation" class="mw-redirect" title="Real estate valuation">Real estate valuation</a></li> <li><a href="/wiki/Remortgage" title="Remortgage">Remortgage</a></li> <li><a href="/wiki/Rental_value" title="Rental value">Rental value</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Parties</th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Real_estate_appraisal" title="Real estate appraisal">Appraiser</a></li> <li><a href="/wiki/Buyer_agent" class="mw-redirect" title="Buyer agent">Buyer agent</a></li> <li><a href="/wiki/Buyer_broker" class="mw-redirect" title="Buyer broker">Buyer broker</a></li> <li><a href="/wiki/Chartered_Surveyor" title="Chartered Surveyor">Chartered Surveyor</a></li> <li><a href="/wiki/Exclusive_buyer_agent" title="Exclusive buyer agent">Exclusive buyer agent</a></li> <li><a href="/wiki/Land_banking" title="Land banking">Land banking</a></li> <li><a href="/wiki/Landlord" title="Landlord">Landlord</a></li> <li><a href="/wiki/Moving_company" title="Moving company">Moving company</a></li> <li><a href="/wiki/Property_manager" title="Property manager">Property manager</a></li> <li><a href="/wiki/Real_estate_agent" title="Real estate agent">Real estate broker</a></li> <li><a href="/wiki/Real_estate_investment_club" title="Real estate investment club">Real estate investment club</a></li> <li><a href="/wiki/Real_estate_investment_trust" title="Real estate investment trust">Real estate investment trust</a></li> <li><a href="/wiki/Real_property_administrator" class="mw-redirect" title="Real property administrator">Real property administrator</a></li> <li><a href="/wiki/Leasehold_estate" title="Leasehold estate">Tenant</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Other</th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Category:Real_estate_companies" title="Category:Real estate companies">Companies</a></li> <li><a href="/wiki/Eviction" title="Eviction">Eviction</a></li> <li><a href="/wiki/Filtering_(housing)" title="Filtering (housing)">Filtering</a></li> <li><a href="/wiki/Gentrification" title="Gentrification">Gentrification</a></li> <li><a href="/wiki/Graduate_real_estate_education" class="mw-redirect" title="Graduate real estate education">Graduate real estate education</a></li> <li><a href="/wiki/Green_belt" title="Green belt">Green belt</a></li> <li><a href="/wiki/Category:Real_estate_indices" title="Category:Real estate indices">Indices</a></li> <li><a href="/wiki/Category:Real_estate_industry_trade_groups" title="Category:Real estate industry trade groups">Industry trade groups</a></li> <li><a href="/wiki/List_of_real_estate_investment_firms" title="List of real estate investment firms">Investment firms</a></li> <li><a href="/wiki/Land_banking" title="Land banking">Land banking</a></li> <li><a href="/wiki/Category:Businesspeople_in_real_estate" title="Category:Businesspeople in real estate">People</a></li> <li><a href="/wiki/Property_cycle" title="Property cycle">Property cycle</a></li> <li><a href="/wiki/Real_estate_trends" title="Real estate trends">Real estate trends</a></li> <li><a href="/wiki/Undergraduate_real_estate_programs" class="mw-redirect" title="Undergraduate real estate programs">Undergraduate real estate programs</a></li> <li><a href="/wiki/Urban_decay" title="Urban decay">Urban decay</a></li> <li><a href="/wiki/Urban_planning" title="Urban planning">Urban planning</a></li> <li><a href="/wiki/List_of_housing_markets_by_real_estate_prices" class="mw-redirect" title="List of housing markets by real estate prices">List of housing markets by real estate prices</a></li></ul> </div></td></tr><tr><td class="navbox-abovebelow" colspan="2"><div> <ul><li> <span class="noviewer" typeof="mw:File"><span title="Category"><img alt="" src="//upload.wikimedia.org/wikipedia/en/thumb/9/96/Symbol_category_class.svg/16px-Symbol_category_class.svg.png" decoding="async" width="16" height="16" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/en/thumb/9/96/Symbol_category_class.svg/23px-Symbol_category_class.svg.png 1.5x, //upload.wikimedia.org/wikipedia/en/thumb/9/96/Symbol_category_class.svg/31px-Symbol_category_class.svg.png 2x" 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rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1129693374"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1239400231"><div class="navbar plainlinks hlist navbar-mini"><ul><li class="nv-view"><a href="/wiki/Template:Debt" title="Template:Debt"><abbr title="View this template">v</abbr></a></li><li class="nv-talk"><a href="/wiki/Template_talk:Debt" title="Template talk:Debt"><abbr title="Discuss this template">t</abbr></a></li><li class="nv-edit"><a href="/wiki/Special:EditPage/Template:Debt" title="Special:EditPage/Template:Debt"><abbr title="Edit this template">e</abbr></a></li></ul></div><div id="Debt232" style="font-size:114%;margin:0 4em"><a href="/wiki/Debt" title="Debt">Debt</a></div></th></tr><tr><th scope="row" class="navbox-group" style="width:1%">Instruments</th><td class="navbox-list-with-group navbox-list navbox-odd hlist" style="width:100%;padding:0"><div style="padding:0 0.25em"></div><table class="nowraplinks navbox-subgroup" style="border-spacing:0"><tbody><tr><th scope="row" class="navbox-group" style="width:1%;font-weight:normal;"><a href="/wiki/Bond_(finance)" title="Bond (finance)">Bonds</a></th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Corporate_bond" title="Corporate bond">Corporate</a></li> <li><a href="/wiki/Debenture" title="Debenture">Debenture</a></li> <li><a href="/wiki/Government_bond" title="Government bond">Government</a></li> <li><a href="/wiki/Municipal_bond" title="Municipal bond">Municipal</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%;font-weight:normal;"><a href="/wiki/Loan" title="Loan">Loans</a></th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Business_loan" title="Business loan">Business loan</a></li> <li><a href="/wiki/Credit" title="Credit">Consumer 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href="/wiki/History_of_debt_relief" title="History of debt relief">history</a>)</li> <li><a href="/wiki/Debt_restructuring" title="Debt restructuring">Restructuring</a></li> <li><a href="/wiki/Debt_snowball_method" title="Debt snowball method">Debt snowball method</a></li> <li><a href="/wiki/Debtor-in-possession_financing" title="Debtor-in-possession financing">Debtor-in-possession (DIP) financing</a></li> <li><a href="/wiki/Loan_guarantee" title="Loan guarantee">Loan guarantee</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%"><a href="/wiki/Debt_collection" title="Debt collection">Collection</a> <b>·</b> <a href="/wiki/Debt_evasion" title="Debt evasion">Evasion</a></th><td class="navbox-list-with-group navbox-list navbox-even hlist" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Bad_debt" title="Bad debt">Bad debt</a></li> <li><a href="/wiki/Charge-off" title="Charge-off">Charge-off</a></li> <li><a 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