How Do You Spell SECURITISE?

1. To "securitise" is a financial and economic term that refers to the process of converting an illiquid asset or a group of assets into marketable securities. This process involves packaging and selling these securities to investors, typically in the form of bonds or asset-backed securities, in order to raise capital for the issuing company or institution.

   The securitisation process involves several steps. Firstly, a company will identify a pool of assets, such as mortgages, loans, or accounts receivables, that have a reliable income stream associated with them. These assets are then transferred to a special purpose vehicle (SPV), a separate legal entity created solely for the purpose of securitisation.

   Next, the SPV issues securities that are backed by the income generated from the underlying assets. These securities are often divided into different tranches, each with different levels of risk and return. They are then sold to investors in the financial markets.

   By securitising assets, companies are able to convert non-liquid assets into cash, which can be used for various purposes, such as debt repayment, funding new projects, or expanding operations. The process also helps diversify risk by spreading it across a larger group of investors.

   Securitisation has gained popularity as it allows companies to unlock the value of their assets while providing investors with the opportunity to invest in a wide range of securities. However, it also carries risks, particularly if the underlying assets turn out to be of poor quality or the income generated is lower than expected.

The word "securitise" is derived from the noun "security". It involves the addition of the suffix "-ize" which indicates the conversion or transformation of something into a particular state or condition. In this case, "securitise" refers to the process of turning an asset or financial instrument into a security.

Conjugate verb Securitise