SCN-3 “SECURITIZATION”Atul Khurana
Welcome to the SCN Series.
Today’s Topic is: Securitization
It is the process of converting the illiquid assets of the company into the securities.
The company (originator) transfers its illuquid financial assets to the Asset Reconstruction Company (ARC) which in turn pay cash to the originator and then ARC with the involvement of Special Purpose Purpose Vehicle (SPV) convert the assets into securities and sell the same to the investors.
#Originator gets immediate cash for illiquid assets.
#The money collected from issuing of securities will be used by ARC for further investments and in this way ARC makes money.
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