A cut-off date is the date by which certain events must occur in order for an asset to be included in a securitisation. For example, the cut-off date might be the date on which a loan is originated or the date on which a mortgage is closed.
The cut-off date is important because it helps to ensure that the underlying assets in a securitisation are homogeneous. This is important because it allows investors to assess the risk of the securitisation more accurately.
Here are some examples of cut-off dates in securitisation:
- A securitisation of mortgages might have a cut-off date of 30 days before the closing of the securitisation. This means that any mortgages that are originated after the cut-off date will not be included in the securitisation.
- A securitisation of credit cards might have a cut-off date of 12 months before the closing of the securitisation. This means that any credit cards that are opened after the cut-off date will not be included in the securitisation.
The cut-off date is a standard part of the securitisation process, and it is important for investors to understand how it works.