In the context of securitisation, a sponsor is the entity that originates the assets that are being securitised. The sponsor is responsible for selecting the assets, structuring the securitisation, and marketing the securities to investors.
In Australian English, a sponsor is sometimes called a securitiser.
Here are some of the applications of sponsors in securitisation:
- Originating assets: The sponsor is responsible for originating the assets that are being securitised. This includes identifying the assets, assessing their creditworthiness, and negotiating the terms of the securitisation.
- Structuring the securitisation: The sponsor is responsible for structuring the securitisation. This includes determining the type of securitisation, the structure of the tranches, and the terms of the securities.
- Marketing the securities: The sponsor is responsible for marketing the securities to investors. This includes preparing the offering documents, contacting potential investors, and arranging roadshows.
Here are some examples of sponsors in securitisation:
- Banks: Banks are often sponsors of securitisations. This is because they have access to a large pool of assets, and they have the expertise to structure and market securitisations.
- Asset managers: Asset managers are also often sponsors of securitisations. This is because they have the expertise to select and manage assets, and they have the network to market securitisations to investors.
- Special purpose vehicles (SPVs): SPVs can also be sponsors of securitisations. This is because they are specifically designed to hold assets and issue securities, and they can be structured in a way that minimizes the risk to investors.