Securitisation

From The Jolly Contrarian
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Top Trumps®
Financial Weapons of Mass Destruction®


Securitisation.jpg


Securitisation


Ground control to major financial crisis


Docs Yuuuuuge, utterly impenetrable. What's that ratings methodogy all about? 9
Amendability Nope. As is, where is. 10
Collateral The Berlin trilogy and Ziggy Stardust, or a thrice-mortaged leaky condo in Law Vegas borders ... you choose 6
Transferability Some in theory, but none in practice when you need it. 7
Leverage Tranche-tastic. 8
Fright-o-meter Dull and workmanlike, as long as we're not talking RMBS. 7

The process of financing an abstract contractual right for the payment of money — or more usually, a large collection of abstract contractual rights — like a portfolio of credit card receivables, student debts, commercial mortgages or albums full of moody instrumentals recorded in Berlin — by dumping them in selling them at their market value to an espievie, and having the espievie issue m,edium term notes secured on the espievie’s rights and title to that portfolio of mortgages.

Rescued a rock star’s moribund career in the 1990s, nearly blew up the financial world in 2008. So a boon and a bane, really.