Securitisation SF

Which of the following assets are commonly used in securitization?

• Mortgages

• Credit card debt

• Car loans

• All of the above

Project Finance, Real Estate Finance, Aviation Finance and Infrastructure Finance are examples of

• Initial Public Offerings

• Securitization

• Structured Finance

• Bond origination

In a securitization, the following is true

• The seller of the assets guarantees the performance of the asset pool

• Only residential or commercial mortgages can be securitized

• The securities created as a result of the process are not rated

• The securities created as a result of the process are rated

Operating lease financing could be used for which of the following?

• Aviation finance

• Syndicated loans

• Revolving credit facilities

• Real estate finance

Securitization is good because

• Banks can increase credit risk on their balance sheets

• Banks can reduce credit risk on their balance sheets

• Investors can buy at good discounts

• it lowers the overall risk of the securitised products

Securitization is bad because

• The tail risk tends to be very low

• The tail risk tends to be underestimated

• It is a simple investment product to understand

• it is a highly diversified product

Project Finance has these features except

• It is a non-recourse debt

• It is a long term financing

• It does not have any risk exposed to Sponsor

• It is dependent on the successful development and operation of the project