securitized
Converted to bonds
Securitized describes assets that have been converted into tradable securities.
A bank might bundle thousands of individual mortgages, car loans, or credit card debts into a single financial product that investors can buy and sell: securitized mortgage debt.
The 2008 financial crisis was fueled partly by securitized subprime loans whose risks were poorly understood.
Backed by home loans
- asset-backedSecured by underlying property
- collateralizedBacked by pledged assets
- CDOsPooled debt instruments
- ABSAnti-lock braking system
tranches · structured · bonds · debentures · notes · obligations · synthetic · pass-through
Act of bringing forth
- poolingMerging shared contributions
- underwritingRisk evaluation and acceptance
- conduitsChannels for conveying substances
- servicingPerforming routine maintenance
warehousing · issuer · arranger · trustee
Exchanging for value
- liquidityConvertibility to cash
- investorsThose who commit capital
- bondholdersOwners of debt securities
- institutionalOf formal establishments
pricing · spreads · yield · coupon · S&P · Fitch · disclosure · prospectus
Preset standard option
- prepaymentPayment made beforehand
- subprimeUnder top credit tier
- exposureState of being unprotected
- subordinationLower position in hierarchy
waterfall · haircut · delinquency · write-down · impairment
mortgage-backed
Backed by home loans
- asset-backedSecured by underlying property
- collateralizedBacked by pledged assets
- CDOsPooled debt instruments
ABS · tranches · structured · bonds · debentures · notes · obligations · synthetic · pass-through
origination
Act of bringing forth
- poolingMerging shared contributions
- underwritingRisk evaluation and acceptance
- conduitsChannels for conveying substances
servicing · warehousing · issuer · arranger · trustee
trading
Exchanging for value
- liquidityConvertibility to cash
- investorsThose who commit capital
- bondholdersOwners of debt securities
institutional · pricing · spreads · yield · coupon · S&P · Fitch · disclosure · prospectus
default
Preset standard option
- prepaymentPayment made beforehand
- subprimeUnder top credit tier
- exposureState of being unprotected
subordination · waterfall · haircut · delinquency · write-down · impairment
securitizedretained
Continued to hold
unpackaged · originated · direct lending · unbundled · bilateral
securitizedilliquid
Not easily converted to cash
unmarketable · locked-in · non-transferable · private · non-negotiable