Question

 “What could be different in the securitization process?”

Answer 1

Securitization process is a process of securitizing the assets of an entity by selling the future cash flows which would otherwise accrue to the entity.Hence,securitization does not envolve borrowing.

Securitization is generally claim against the assets of the entity as whole and not on specific asset. It is different from other modes as its main objective is to work on strenghthning the Balance Sheet to raise funding.Investors risk is subject to entity wide risk.Also,securitization is less amenable to structured funding.In processes leverage is quite high and is associated to portfolio risk but in case of Securitization leverage is limited to entity's regulatory limits.