Information Technology Reference
In-Depth Information
Fig. 12.7
Repackaging and pooling
Fig. 12.8
Tranching
12.6.4.3 Tranching and Dividing
Figure
12.8
shows the process of the tranching. First, the agents are copied to
tranched securities. Next, the body of securities and contracts is reorganized. The
dividing process is similar to that of tranching except that the ranks have the same
level of risk.
12.6.4.4 Operations of Securities
An example of the currency of the securities is shown in Fig.
12.9
.
The originator pools several of the debtors' loans. Next, the pooled loans are
transferred to the SPV. The SPV then issues the securities on the basis of the pool.
The SPV transfers the obligation to the servicer.
Another originator and SPV pool these issued securities and issue repackaged
securities as new assets.
When an investor values his or her securities, the agents operate as follows. The
master agent checks the dependencies of the securities and makes a tree of the
