Securitisation is a financing technique that involves the conversion of usually illiquid assets with predictable cash flows such as home, corporate loans, credit cards etc into marketable securities. Essentially it is the process of creating securities backed by pools of assets with the securities then being sold to institutional investors. Securitisation is utilized by the Financial Organizations as a technique for funding, capital and credit portfolio management.
dBAS+ on Securitisation
dBAS+ provides a comprehensive software solution for all securitisation needs from pool cutting to final redemption. dBAS+ is committed to supporting the Securitisation community in Australia and the Asia Pacific region by creating software solutions which empower our partners with intuitive, flexible, functional software. dBAS+ is also committed to providing a full range of services and local support for its partners.
Pool Life Cycle Overview
Pool Cutting involves the selection of loans (Securities) that are to participate in a securitisation pool (Deal). The types of loans that can be used are defined in the securitisation deal documentation. The definition of loans that can be used will depend on varying demographics dependant on securities such as regions, owner occupied or investment and loan seasoning as well as LVRs, loan amounts, the total pool balance and the number of participating loans.
Pool Initialisation involves the setting up of a pool of loans for securitisation on day 1, adding securities to the pool as defined in the pool cutting phase, specific processing that occurs during the cut-over period and then until the deal is finalized.
Loan transactions are validated, processed and bucketed using defined processes unique to each pool. Accounting General Ledger entries are created for each originator, exception and reconciliation reports are also produced. Loans can be added or removed from the pool via re-purchases, top ups, payouts or substitutions. Users can extract information from the system via canned reports or by customized ad-hoc reporting.
dBAS+ securitisation software caters for the creation of General Ledger transactions, various diarised functions such as step ups, substitutions, payments to note holders and unique note payment cascades which can be defined for each pool. Reporting modules include monthly and ad-hoc reports such as:
- Monthly Loan Summary Report
- Monthly Service Certificates
- Monthly Investor Report
- Monthly Ratings Report
- Monthly or Quarterly Distributions Report
- Other ad-hoc reports via queries run from Excel or other tools
After a period of 7 to 10 years, or when the assets of the pool are around 10% of its initial value, the pool is closed, payments to note holders are finalised and General Ledger entries transfer the remaining securities back the provider.