Securitisierte

Securitisierte is a German term that translates to securitized in English. It refers to the process of taking illiquid assets, such as mortgages, auto loans, or credit card receivables, and pooling them together to create new securities that can be sold to investors. This process is known as securitization. The underlying assets are removed from the originator's balance sheet and are used as collateral for the newly issued securities. These securities are typically structured into different tranches, each with a different level of risk and return, allowing investors to choose a risk profile that suits their needs. The cash flows generated by the underlying assets are then used to pay interest and principal to the holders of these securities. This process can provide originators with a way to raise capital, transfer risk, and improve their balance sheet liquidity. For investors, it offers access to a diversified pool of assets and potentially attractive yields. However, securitization can also introduce complexities and risks, particularly regarding the quality of the underlying assets and the structure of the securities. The market for securitized products played a significant role in the financial crisis of 2008, highlighting the importance of understanding the underlying risks involved.