You are previewing The Mechanics of Securitization: A Practical Guide to Structuring and Closing Asset-Backed Security Transactions.
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The Mechanics of Securitization: A Practical Guide to Structuring and Closing Asset-Backed Security Transactions

Book Description

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.

Table of Contents

  1. Cover
  2. Series Page
  3. Title Page
  4. Copyright
  5. Dedication
  6. Foreword
  7. Preface
  8. Part One: Introduction to Securitization
    1. Chapter 1: Introduction to Securitization and Asset-Backed Securities
      1. The Concept of Securitization
      2. The Process of Securitization
      3. Securitizing Mortgages
      4. ABS Structures: A Primer on Performance Metrics and Test Measures
      5. Securitization: Features of the 2007–2008 Financial Crisis
      6. Summary and Conclusions
      7. References
    2. Chapter 2: The Securitization Market Post-2007
      1. Market Observation
      2. Impact on Rating Agencies
      3. Summary and Conclusions
  9. Part Two: Guide to Closing a Securitization Transaction
    1. Chapter 3: Structuring and Execution of a Transaction
      1. A Securitization Process
      2. Summary and Conclusions
    2. Chapter 4: The Rating Agency Process and Legal Review
      1. Select Rating Agencies
      2. Undertaking Legal Due Diligence
      3. Begin Drafting Documents
      4. Set Up the SPV
      5. Modeling the Transaction
      6. Determine Capital Structure/Trigger Levels
      7. Prepare Marketing Materials
      8. Pricing, Close, and Settlement
      9. Summary and Conclusions
    3. Chapter 5: Static Synthetic CDO Cash Flow Waterfall Model
      1. Summary and Conclusions
  10. Part Three: Transaction Closing Templates and Checklists
    1. Chapter 6: Transaction Templates and Checklists
      1. Red Sea Master Series Limited Structure Diagram
      2. Underlying Asset Pool
      3. Draft Term Sheet
      4. Closing Process
      5. Structuring Notes
      6. Rating Agency Preparation and Questionnaire
      7. Loan-Level Data: Rating Agency Checklist
      8. Agenda for Rating Agency Site Visit
      9. Legal Counsel Review
      10. Form of Transfer Certificate
      11. Investor and Rating Agency Presentation Template
      12. In-House Credit Rating Mapping Chart: Lower and Upper Values
      13. Rating Agency Presentation: Corporate Bank Origination Processes
      14. Loan Transfer Schedule of Tasks
      15. Loan Transfers, Accounting Movements
      16. Sign-Off Document: Securitization Project
      17. Securitization Testing: Finance Department
      18. Accounting Process on Closing
      19. EUR Junior Tranche Trade Ticket
      20. Senior Tranche Trade Ticket
      21. Internal Transfer Booking Process
      22. Questions from Trustee, Paying Agent, and Services Provider
      23. Summary and Conclusions
  11. About the Authors
  12. Index