Asset Securitization

There are several ways to form the asset securitization, such as a Special Purpose Securitization Vehicle, where the assets through a trust indenture or commitment are transferred to or pledged to the SPSV for safe keeping. The SPSV could also simply hold the right and transferability of a “safe keeping receipt” or SKR, which is a financial document and method of holding the assets on behalf of the owner, which can have a loan drawn against it. The SKR value and assets therefore would be issued in the name of the SPSV. Safe Keeping Receipts are often used in transactions where proof of product is required, but it can also be used in securitization. Essentially a Safe Keeping Receipt is a form of securitization as it takes the bundle of assets and places their ownership inside of a Bank for the purpose of leveraging for a loan. By combining this with a Bond or Fund, the investment is secured by the SKR value, and can give a fixed or variable rate of return to the investor based on the “bond” or “fund” interest offering. One of the key elements of giving the full value to the asset securitization is also the inclusion of a 3rd party valuation of the asset or intangible value of the use of funds for the business that is securitized.