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Securitisation companies

D7.205 Securitisation companies—overview

Securitisation is the conversion of an asset into a (marketable) security, usually to de-risk ownership of the underlying asset and/or to raise funds from otherwise illiquid holdings. Most commonly, securitisation involves a company with debt assets which generate a flow of income using that flow of income to back the issue of further securities. Credit card companies and mortgage companies, for example, make use of securitisation arrangements of this kind. However, securitisation is not limited to debts. Wherever there is a fairly certain stream of income, it may be possible to securitise it. Accordingly, a landlord with a stream of rental income might be able to issue marketable securities backed by the income stream from the rented properties. A pop star about to embark on a world tour might be able to issue marketable securities, backed by the anticipated income stream from the ticket sales for the tour.

Securitisation arrangements do not necessarily involve the creation of special purpose vehicles (SPVs). However, a