securitization

securitization definition - finance
The process of packaging debt instruments into one group and then issuing new debt securities that are backed by the pool of assets that the debt is issued on. Investors receive the cash flow from the underlying debt. This process redistributes risk among a wider group of investors. A typical securitization is asset-backed securities where the debt issued is backed by the underlying assets.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

Comments
Improve this definition.
Do you have more to add? Share your linguistic knowledge or observation.
/Register to save your comments.