- Receivable is a term used to describe a financial asset that represents a right to receive payment from another party.
- In the context of securitisation, receivables are typically used as the underlying assets for securitisation transactions.
There are a number of different types of receivables that can be used in securitisation, including:
- Trade receivables: These are receivables that arise from the sale of goods or services on credit.
- Factoring receivables: These are receivables that are sold to a third party, known as a factor, at a discount.
- Loan receivables: These are receivables that arise from the lending of money to another party.
- Credit card receivables: These are receivables that arise from the use of credit cards.
Receivables are used in securitisation because they offer a number of advantages, including:
- They are relatively liquid: This means that they can be easily sold to investors.
- They have a predictable cash flow: This means that investors can be confident of receiving regular payments.
- They can be diversified: This means that investors can reduce their risk by investing in a pool of receivables from different borrowers.
Here are some examples of how receivables are used in securitisation:
- Mortgage-backed securities: Mortgage-backed securities are typically backed by a pool of mortgage receivables.
- Collateralized debt obligations: Collateralized debt obligations (CDOs) can be backed by a pool of different types of receivables, such as trade receivables, loan receivables, and credit card receivables.
Receivables are an important asset class in securitisation, and they can be used to create a variety of securitisation products.