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Securitization Securitization is a financing process in which a corporate entity moves assets to an ostensibly bankruptcy-remote vehicle to obtain lower interest rates from potential lenders--because the assets cannot be seized in a bankruptcy proceeding, the risk is less for lenders and they are willing to offer a lower rate. The technique comes under the umbrella of structured finance as it applies to assets that typically are illiquid contracts (i.e. assets that cannot easily be sold). A few Large structured settlement funding companies use securitization techniques which provides them with a low cost of funds and makes them more competitive. The Wall Street boys love asset backed securities in a securitization.
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