Understanding Securitization and ABS

Fitch Learning

How long?

  • 1 day
  • in person

Fitch Learning

Disclaimer

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Full disclaimer.

Who should attend

An introductory workshop for those new to the securitization market or seeking an understanding of the ABS product.

About the course

Using credit card transactions as an example, this course runs through the main elements of Securitization. From why financial institutions use them for funding their businesses, to why investors like them for medium to long term investments, and to understanding why the deals appear to be so complicated.

The course provides basic analytical techniques which can be applied across different structures and collateral pools.

Key Learning Outcomes:

  • Use a structured approach to understand ABS (using credit card ABS as the illustration asset class): basic transaction structures, roles of the parties, and originator motivations
  • Recognize the main risks pertaining to the collateral, originator and servicer
  • Appreciate how asset characteristics and desired ratings impact credit enhancement levels
  • Identify key risks and understand how they are allocated within ABS structures
  • Understand the impact of recent government initiatives and regulatory changes on the ABS market.

Introduction

  • Why securitization? Originator and investor motivations
  • Parties to the transaction and their roles
  • Overview of securitization market.

Purpose: Payback

Analytic approach to credit

  • Introducing a structured approach to analysis: purpose, payback, risk and structure
  • Application of the structured approach to various types of ABS securities.

Risks to Repayment

Collateral

  • Analytic focus: credit card ABS
  • Key performance variables: applying steady state assumptions and credit stresses
  • Understanding how credit enhancement is sized
  • Modelling the impact of various stress scenarios across different credit card portfolios

Originator / servicer evaluation

  • Company analysis: commercial and financial viability
  • Risks arising from the business model
  • Servicer ratings: why, how and impact on credit enhancement

Structure

Credit Enhancement (CE)

  • Understanding the role and various forms of CE
  • Unravelling CE across asset classes (credit card, auto, and mortgage transactions)
  • Clarifying loss allocation
  • Safeguards: ensuring credit enhancement mechanisms provide adequate protection

Note Profile

  • Cash-flow waterfalls: Amortizing and non-amortizing assets
  • Cash flow allocation mechanics
  • Early amortization triggers: how they are set and how they operate

Legal Safeguards

  • Key legal safeguards: isolation of assets
  • Reps and warranties.

Monitoring Performance

  • Surveillance: collateral, originator / servicer
  • Interpreting performance to identify early warning signals
  • Overview of performance across asset classes.

Relative Value

  • Pricing of ABS transactions: risk vs. return
  • Credit trends in ABS: pockets of risk.

Videos and materials

Understanding Securitization and ABS at Fitch Learning

From  $995

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Disclaimer

Coursalytics is an independent platform to find, compare, and book executive courses. Coursalytics is not endorsed by, sponsored by, or otherwise affiliated with any business school or university.

Full disclaimer.

Because of COVID-19, many providers are cancelling or postponing in-person programs or providing online participation options.

We are happy to help you find a suitable online alternative.