Query by : what are the “method of securitization” invovle?
please describe in particulars

Ideal answer:

Answer by Arbitrage
Securitization refers to the processing generating some assets into a a lot more liquid, tradable security. There are frequently done with mortgages, exactly where the mortgage organization will sell off its loans right after they’re turned into bonds. They have the exact same fundamental money flow because it’s money coming in but mortgages aren’t liquid. By converting the cash flow into bonds, they have the potential to enhance the credit rating of the bonds. Usually, bonds issued by a company have a credit rating equal to the firm, but with these asset backed securities, they can also constantly issue at AAA.

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