GENERAL DEFINITION:​
The securitization normally is defined as a process of converting a debt (or a non liquid asset) into securities.
This debit is an asset that is transferred to a third party who pays to the seller (initiator) the price conditioned to the assets´ placement in the capital market in the form of securities by the first party. The important thing is that this transfer will decouple asset´s risk linked to the transferor in order to be fully immunized against a possible suspension of payment (the "bankruptcy remoteness" is the key to securitization).
Therefore, it is a financial technique that transforms illiquid assets into liquid securities (bonds or other).
An asset for which there is an efficient market at any time, allowing the investor to sell or buy, is considered "liquid", while the definition of an asset for which there is no an efficient market is "illiquid".
​ASSETS OR RISKS THAT MAY BE SUBJECT TO A SECURITIZATION
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• Commercial credits (R invoices, for example),
• Mortgage loans
• Current accounts,
• Stocks, subordinated or not debenture loans,
• Any financial asset,
• Any real property (including real estate),
• A real estate project,
• All business risks,
• Some risk clauses in contracts.
​THE COMPANY OF SECURITIZATION IN THE REAL ESTATE SECTOR
​Transfer of a building or real estate property.
The Company will issue securities to the holder. These securities are anonymous and freely transferable. These securities may be sold freely to one or several investors.
The rental income of the building:
Each security is entitled to a share of the revenue from real estate. No deduction is made in the payment of rent to the owners of the securities.
In the case of building´s sale:
– Either the company sells directly the building,
– Or the securities are transferred to the new buyer without any notary fee and register.
Ease of entering another capital in a Securitization Company. Property tax is paid in the country where the property is located.
​¿WHY THE SECURITIZATION IS USEFUL?
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The company using securitization has an immediate need for cash. However, this is a company with assets capable of arousing interest among investors, but it is rather special interest: it is not the ownership of these assets that attracts, but the results they generate, either by their exploitation, or by their assignment.