Emerging Financial Instrument In Turkey: Asset Backed Securitization

Asset Backed Securities

Securitization is the transformation of receivables and cash flow created from a collection of financial assets into securities which are backed by these assets. Hence, the idea of securitization is to generate a capital market product and it results in the generation of a security which is a marketable product, asset backed securities are considered both a fixed income and a derivative instrument.

Asset securitization is the issuance of a debt instrument backed by a revenue producing asset of the issuing company and this encompasses producing bearer asset backed securities which can be freely traded and which are secured by a portfolio of receivables. So as to ensure marketability, the instrument must have general acceptability as a store of value; therefore the security is generally either rated by credit rating agencies, or is guaranteed by an independent guarantor.