What is meant by Securitization? Which parties are involved in the process of Securitization ?

Securitization is the transformation of financial assets into securities. Securitization is used by financial entities to raise funding other than what is available via the traditional methods of on-balance-sheet funding. Securitization is a technique used to convert illiquid assets/claims in to tradable securities. In other words, Securitization is the process of pooling and repackaging of homogenous illiquid financial assets into marketable securities that can be sold to investors. The process leads to the creation of financial instruments that represent ownership interest in, or are secured by a segregated income producing asset or pool of assets. Parties involved in Securitisation Primary Parties - The Originator (Banks/Fls who has lent loan against properties) SPVs (Securitisation Company or reconstruction Company) Investors (To whom securities are issued, which is a participative interest against the pool of receivables which is bought by the SPVs from the originator). Besides above parties the following are involved in the Process of securitization. The obligator (i.e., original borrower of the loan) Rating agency Administrator