The Fundamentals of Securitization

Training Description

The Fundamentals of Securitization

The Fundamentals of Securitization training provides you with a deep understanding of the mechanisms, challenges, and best practices related to securitization operations in financial markets.

In a context where securitization plays a key role in financing institutions and managing bank balance sheets, it is essential to understand its functioning, benefits, and risks, especially after the reforms implemented following the 2008 financial crisis.

This training covers the fundamental concepts of securitization, including transaction structuring, risk tranche classification, credit enhancements, and the main classes of securitized assets (ABS, MBS, CLO). It also addresses regulatory impacts (IFRS, Basel III, STS directive) and associated investment and risk management strategies.

Through a combination of theory and practical case studies, you will develop a clear vision of the opportunities and challenges of securitization and will be able to effectively assess the quality and compliance of operations in this evolving market.

Training Objectives

• Understand the fundamental principles of securitization and its role in financing financial institutions.
• Identify the key players involved in a securitization transaction and their respective responsibilities.
• Analyze the different securitization structures, including risk tranches (Senior, Mezzanine, Equity) and credit enhancement mechanisms.
• Evaluate the different classes of securitized assets (ABS, MBS, CLO) and their impact on financial markets.
• Apply the main methodologies for measuring risks related to securitization, including credit, liquidity, and market risks.
• Understand the regulations governing securitization, such as the STS directive, IFRS, and Basel III requirements.
• Interpret credit ratings from rating agencies and their impact on the structuring and marketing of securitized securities.
• Implement risk management strategies to optimize the efficiency of securitization operations.
• Study real-life cases of successful securitization and analyze notable failures (e.g., subprime crisis).

Target Audience

• Fund managers and asset managers looking to integrate securitized securities into their investment strategy.
• Financial analysts and credit analysts responsible for assessing the quality of securitized products and their impact on portfolios.
• Bankers and structured finance professionals involved in structuring and managing securitization transactions.
• Risk managers and risk specialists seeking to better understand the risks associated with securitized products (credit, liquidity, market).
• Corporate and bank treasurers looking to optimize balance sheet management through asset securitization.
• Lawyers and financial regulators wanting to understand the regulatory frameworks applicable to securitization operations (STS, Basel III, IFRS).
• Auditors and consultants responsible for evaluating and monitoring securitization transactions for financial institutions.

Training Duration

• 2 days (14 hours)

Training Program

The Fundamentals of Securitization

I. Introduction to Securitization

• Definition and Principles of Securitization
• History and Evolution of the Market
• Key Players in a Securitization Transaction:
• • Originators
  • SPV (Special Purpose Vehicle)
  • Investors
  • Rating Agencies
  • Regulators

Case Study:

Analysis of a real case of bank asset securitization

II. Structure and Mechanisms of Securitization

• The Securitization Process
• Asset Transfer and the "True Sale" Concept
• Tranche Structuring:
• • Senior, Mezzanine, Equity
  • Impact of Subordination
• Role of Credit Enhancements
• Investor Payment Mechanisms

Quiz

III. Types of Securitized Assets

• Mortgage-Backed Securities (MBS): RMBS, CMBS
• Corporate Debt Securitization: ABS (Asset-Backed Securities)
• Consumer and Auto Loan Securitization
• Loan and Bond Securitization: CLO (Collateralized Loan Obligations)
• Non-Conventional Asset Securitization: factoring, royalties, etc.

Quiz

IV. Risks and Limitations of Securitization

• Credit and Counterparty Risks
• Market and Interest Rate Risks
• Operational and Legal Risks
• Lessons from the 2008 Subprime Crisis

Case Study:

Study of a securitization transaction before and after 2008

V. Regulation and Legal Framework

1. International Regulation

• Accounting and Prudential Standards (IFRS, Basel III, Solvency II)
• U.S. Legal Framework and SEC Regulations

2. European Regulation

• STS Directive (Simple, Transparent, Standardized Securitization)
• Impact of Post-Financial Crisis Reforms

Case Study:

Assessing compliance of a securitization transaction with STS criteria

VI. Market Outlook and Future Developments in Securitization

1. Current Trends

• Resurgence of CLOs and ABS
• Impact of Interest Rates on Securitization Transactions

2. Innovations and New Products

• Securitization of Digital Assets and Blockchain
• Emergence of Asset Tokenization

Case Study:

Study of a blockchain-based securitization project

📌 Deepen Your Knowledge on This Topic

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