Question

A transaction where financial securities are issued against the cash flow generated from a pool of assets is called

Answer 1

A transaction where financial securities are issued against the cash flow generated from a pool of assets is called: Specialties.

Answer 2

Answer:

A transaction where financial securities are issued against the cash flow generated from a pool of assets is called Securitization.

Explanation:

• In the US, securitization began in 1970 when public housing finance firms issued residential mortgages.
• In the capital market, there is a clear trend toward the securitization of a variety of assets, including insurance receivables, commercial bank loans, commitments to acquire natural gas producers, future royalties rights, etc.
• Even if the Act pertaining to the reconstruction of financial assets and the enforcement of security interests contains securitization provisions, in practise these provisions are independent, and in reality, assets with a solid credit rating can also be securitized.

Selling and buying loans and accounts receivable through an Asset Reconstruction Company is known as securitization.

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