Securitization Series

From asset-backed securities to credit-linked notes, our securitization courses are designed to include all aspects of securitization. Securitization is the process through which loans or debts are pooled together to create a new debt security. Although corporate debt is typically an IOU, by which the issuer agrees to pay interest in addition to repaying the principal amount borrowed, the note created in the securitization process relies on the underlying loans used in the pooling process to pay interest and repay debt.

Once created, securitized notes may then be issued as a single note or sliced up to create different tranches, such as in Collateralized Mortgage Obligations (or CMO’s) or Commercial Mortgage Backed Securities (or CMBS). No matter what the underlying loan, investors look to the underlying cash flows to ensure interest and principal payments are made.