So if the originator creates assets that are crap by lending to someone who can't pay the money back and sells them off to the SPV and they are bundled with other crap but the total bundle of crap is given a AAA credit rating, what will happen? Esp if the investor or the originators take out credit default swaps on the securities (CDOs)? And Europe now is going to create an SPV to buy crappy debt and sell securites based off of it?
Very useful video. I'm trying to understand the functioning of remittances backed securites, I have read that the SPE in this case needs to be offshore this allows the securities sold to investors to be ranked better than gov bonds due to the fact that agencies believe them to be less risky given that remittances ($/euro) do not enter the developing country and are thus not subject to the currency conversion risk. how can they be able to pay back both remittance recipients and investors?
Very good video. I would just add that the originator may not be the firm that generated the cashflow-generating assets. The originator is the player that originates the process of securitization, that is, creates the SPE. It may or may not be the Lender. The Lender could be a commercial bank, that sold the portfolio of assets to an Investment bank, and that IB would be the originator of the securitization. If I am wrong, point me to a credible source that puts me right. Thanks.
Thanks, i haven't seen originator used that way. Instead, the ibank there, who may be warehousing, tends to be called issuer or transferor. Originator (just IMO) connotes the entity who sourced the loan; i.e., proximity to the borrower. So, I'm not sure... But I do totally agree, securitization requires entity who owns the assets/paper. Where the pooling/transfer of assets is the 1st essential feature; the 2nd is the division into tranched claims on the investor side.
Thanks a lot for replying. I sent you some questions regarding cash/currency/money/FED/reserves doubts via PM. Did you by any chance not get them? I'm really dying to know the answer to those questions, and if needed I can resend them to you.
Not yet, i have a forum on my site (see channel for link). That's where i answer customer and other questions, I typically don't have the capacity to answer private questions (apologies) as i am always behind on even my customer queries. But if you think it fits the BT forum, by all means try there. Thanks for your interest.
Fantastic video mate, thanks from Scotland!
JoeMcdonnell 2 months ago
So if the originator creates assets that are crap by lending to someone who can't pay the money back and sells them off to the SPV and they are bundled with other crap but the total bundle of crap is given a AAA credit rating, what will happen? Esp if the investor or the originators take out credit default swaps on the securities (CDOs)? And Europe now is going to create an SPV to buy crappy debt and sell securites based off of it?
ChulaKirby 4 months ago
Very useful video. I'm trying to understand the functioning of remittances backed securites, I have read that the SPE in this case needs to be offshore this allows the securities sold to investors to be ranked better than gov bonds due to the fact that agencies believe them to be less risky given that remittances ($/euro) do not enter the developing country and are thus not subject to the currency conversion risk. how can they be able to pay back both remittance recipients and investors?
fallingsnowieflakes 9 months ago
Very good video. I would just add that the originator may not be the firm that generated the cashflow-generating assets. The originator is the player that originates the process of securitization, that is, creates the SPE. It may or may not be the Lender. The Lender could be a commercial bank, that sold the portfolio of assets to an Investment bank, and that IB would be the originator of the securitization. If I am wrong, point me to a credible source that puts me right. Thanks.
dakshinamurti 3 years ago
Thanks, i haven't seen originator used that way. Instead, the ibank there, who may be warehousing, tends to be called issuer or transferor. Originator (just IMO) connotes the entity who sourced the loan; i.e., proximity to the borrower. So, I'm not sure... But I do totally agree, securitization requires entity who owns the assets/paper. Where the pooling/transfer of assets is the 1st essential feature; the 2nd is the division into tranched claims on the investor side.
bionicturtledotcom 3 years ago
Thanks a lot for replying. I sent you some questions regarding cash/currency/money/FED/reserves doubts via PM. Did you by any chance not get them? I'm really dying to know the answer to those questions, and if needed I can resend them to you.
dakshinamurti 3 years ago
Not yet, i have a forum on my site (see channel for link). That's where i answer customer and other questions, I typically don't have the capacity to answer private questions (apologies) as i am always behind on even my customer queries. But if you think it fits the BT forum, by all means try there. Thanks for your interest.
bionicturtledotcom 3 years ago