The Mechanics of Securitization E-Book

Suleman Baig

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Wiley Finance Editions
• Sprache: Englisch

Seitenzahl: 186

Veröffentlichungsjahr: 2013

Beschreibung

A step-by-step guide to implementing and closing securitization transactions Securitization is still in wide use despite the reduction in transactions. The reality is that investors and institutions continue to use this vehicle for raising funds and the demand for their use will continue to rise as the world's capital needs increase. The Mechanics of Securitization specifically analyzes and describes the process by which a bank successfully implements and closes a securitization transaction in the post subprime era. This book begins with an introduction to asset-backed securities and takes you through the historical impact of these transactions including the implications of the recent credit crisis and how the market has changed. * Discusses, in great detail, rating agency reviews, liaising with third parties, marketing the deals, and securing investors * Reviews due diligence and cash flow analysis techniques * Examines credit and cash considerations as well as how to list and close deals * Describes the process by which a bank will structure and implement the deal, and how the process is project managed and tested across internal bank departments While securitization transactions have been taking place for over twenty-five years, there is still a lack of information on exactly how they are processed successfully. This book will put you in a better position to understand how it all happens, and show you how to effectively implement an ABS transaction yourself.

Leseprobe

Contents

Cover

Series Page

Title Page

Copyright

Dedication

Foreword

Preface

Part One: Introduction to Securitization

Chapter 1: Introduction to Securitization and Asset-Backed Securities

The Concept of Securitization

The Process of Securitization

Securitizing Mortgages

ABS Structures: A Primer on Performance Metrics and Test Measures

Securitization: Features of the 2007–2008 Financial Crisis

Summary and Conclusions

References

Chapter 2: The Securitization Market Post-2007

Market Observation

Impact on Rating Agencies

Summary and Conclusions

Part Two: Guide to Closing a Securitization Transaction

Chapter 3: Structuring and Execution of a Transaction

A Securitization Process

Summary and Conclusions

Chapter 4: The Rating Agency Process and Legal Review

Select Rating Agencies

Undertaking Legal Due Diligence

Begin Drafting Documents

Set Up the SPV

Modeling the Transaction

Determine Capital Structure/Trigger Levels

Prepare Marketing Materials

Pricing, Close, and Settlement

Summary and Conclusions

Chapter 5: Static Synthetic CDO Cash Flow Waterfall Model

Summary and Conclusions

Part Three: Transaction Closing Templates and Checklists

Chapter 6: Transaction Templates and Checklists

Red Sea Master Series Limited Structure Diagram

Underlying Asset Pool

Draft Term Sheet

Closing Process

Structuring Notes

Rating Agency Preparation and Questionnaire

Loan-Level Data: Rating Agency Checklist

Agenda for Rating Agency Site Visit

Legal Counsel Review

Form of Transfer Certificate

Investor and Rating Agency Presentation Template

In-House Credit Rating Mapping Chart: Lower and Upper Values

Rating Agency Presentation: Corporate Bank Origination Processes

Loan Transfer Schedule of Tasks

Loan Transfers, Accounting Movements

Sign-Off Document: Securitization Project

Securitization Testing: Finance Department

Accounting Process on Closing

EUR Junior Tranche Trade Ticket

Senior Tranche Trade Ticket

Internal Transfer Booking Process

Questions from Trustee, Paying Agent, and Services Provider

Summary and Conclusions

About the Authors

Index

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Copyright © 2013 by Suleman Baig and Moorad Choudhry. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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The views, thoughts and opinions expressed in this book are those of Suleman Baig in his individual capacity and should not in any way be attributed to Deutsche Bank AG or to Suleman Baig as a representative, director, or employee of Deutsche Bank AG.

The views expressed in this book are an expression of Moorad Choudhry's personal views only and do not necessarily reflect the views or policies of The Royal Bank of Scotland Group plc, its subsidiaries or affiliated companies, or its Board of Directors. RBS does not guarantee the accuracy of the data included in this book and accepts no responsibility for any consequence of their use. This book does not constitute an offer or a solicitation of an offer with respect to any particular investment.

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Library of Congress Cataloging-in-Publication Data:

Baig, Suleman.

The mechanics of securitization: a practical guide to structuring and closing asset-backed security transactions/Suleman Baig, Moorad Choudhry.

p. cm. — (Wiley finance series)

Includes bibliographical references and index.

ISBN 978-0-470-60972-9 (cloth); ISBN 978-1-118-22073-3 (ebk);

ISBN 978-1-118-25895-8 (ebk); ISBN 978-1-118-23454-9 (ebk)

1. Asset-backed financing. I. Baig, Suleman. II. Title.

HG4028.A84C46 2013

332.1′78—dc23

2012038292

To my parents

— Suleman Baig

To a Solid Bond in Your Heart

— Moorad Choudhry

Foreword

It is regrettable that many of securitization's contributions to modern finance have been overshadowed by infamy since the financial crisis. While it has made for popular journalism to debate securitization in the abstract, there has been surprisingly little attempted commentary to actually explain what securitization is or does. Possibly, this is due to the fact that most pundits seem to underappreciate the regularity with which securitization techniques can be found in the financial system. The volume of securitized debt alone warrants more study and transparency in terms of the technology's inner workings. Thus, rather than discounting its utility, current thought leaders of finance (and certainly future students) would be best served by having better access to information around securitization's basic value proposition. Surely a more enlightened understanding would allow the debate to move beyond the rhetorical and reorient efforts toward identifying and deploying more practical uses of the technology. With that in mind, a book focused on explaining the basic mechanics of securitization is long overdue.