SECURITIZATION AS A FUNDING SOURCE OF COMPANIES
SECURITIZATION AS A FUNDING SOURCE OF COMPANIES

Author(s): Dejan Vukosavljević, Danijela Vukosavljević
Subject(s): Social Sciences, Economy
Published by: Udruženje ekonomista i menadžera Balkana
Summary/Abstract: Securitization is in wide use and a component of many risk transfer mechanisms between various parties. It is based on selling risky assets in absolute form, as well as the synthetic transfer of specific risk aspects. This paper aims to define securitization, various contexts of its use, transaction participants and their motivation. Securitization in practice is a process in which loans, receivables and other assets are gathered into pools (packages). Money flows in connection with them are employed as well as economic value as support to securities settlements. Securitization is turning illiquid securities and illiquid assets into liquid securities and liquid assets. The final result of securitization is providing funding for activities of companies by selling their assets gathered into pools (packages), instead of using loans. Methods used in this paper are desk research, as well as the method of analysis, practical application worldwide, etc. This paper proves that securitization can practically be based on any asset the relative value of which can be determined, or which generates relatively predictable future income flow, which does contribute to providing funding of current business activities of a company.

• Details
• Contents