Part Two
Guide to Closing a Securitization Transaction
Part Two goes step by step through the procedure undertaken when designing and closing a securitization deal. The template description given in Chapters 3 and 4 applies to cash transactions in asset-backed securities, mortgage-backed securities, and corporate loan deals. However, they are applicable in principle to virtually any securitization structure and are intended to act as a project management checklist for practitioners.
The guidelines we provide here are brought to life in Part Three of the book, which looks at an actual transaction closed in 2009 and provides templates and illustrations that can be used by practitioners involved in other corporate loan and ABS transactions.
Chapter 5 illustrates a cash flow waterfall model. A defining element of a securitization deal is the liability notes tranching, which produces a waterfall of the order or priority of payments for investors and third parties to the deal. The model guidelines provided in Chapter 5 can be applied in most situations.
