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The Mechanics of Securitization: A Practical Guide to Structuring and Closing Asset-Backed Security Transactions
A step-by-step guide to implementing and closing securitization transactions Securitization is still in wide use despite the reduction in transactions. The reality is that investors and institutions continue to use this vehicle for raising funds and the demand for their use will continue to rise as the world's capital needs increase. The Mechanics of Securitization specifically analyzes and describes the process by which a bank successfully implements and closes a securitization transaction in the post subprime era. This book begins with an introduction to asset-backed securities and takes you through the historical impact of these transactions including the implications of the recent credit crisis and how the market has changed. While securitization transactions have been taking place for over twenty-five years, there is still a lack of information on exactly how they are processed successfully. This book will put you in a better position to understand how it all happens, and show you how to effectively implement an ABS transaction yourself.
208 pages, Hardcover
First published October 9, 2012
23 people are currently reading
68 people want to read
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Displaying 1 - 3 of 3 reviews
October 10, 2025
As an undergraduate looking to break into the niche of securitization, I found The Mechanics of Securitization an excellent starting point to learn more deeply about the mechanics of structured finance.
It is important to clarify that you should already have a basic understanding of what securitization is and of products such as ABS, MBS, and CDOs. Without a background in finance, it will be difficult to grasp most of the book’s content. That said, more than a book, I would describe it as a to-do list for securitization.
The first part covers the origins of structured finance, its peak, and the fundamentals needed to understand each stage of the process. Then, it provides a step-by-step overview of how a securitization is structured — offering enough detail to understand what to expect, what to focus on, and how long each stage might take. As you will learn, securitization often seems more a job for lawyers than for finance professionals, mostly because one must understand the legal nature of the underlying assets. Are they transferable? Is there any legal risk in transferring them off the originator’s balance sheet to the SPV? In the case of loans, is it necessary to inform the borrowers? If personal data are involved, is it legally possible for an external party to review it? I never imagined the process involved such an extensive legal review.
In the final part, the author provides a brief in-house example of a securitization. I must admit, it was not very illustrative — and that is my main critique. As a “to-do list,” the book does a great job navigating through each stage; however, the lack of numerical examples left me with serious doubts. For instance, the book mentions the relevance of the coverage ratio but never provides an example of how to calculate it or how to define each tranche for the issuance. I understand that a deeper explanation might be beyond the book’s introductory scope, but leaving the topic out entirely feels like a missed opportunity.
Overall, I consider it a great book to start learning about structured finance. It is easy to read, easy to follow, and would be a perfect fit for anyone beginning an entry-level position at an arranger bank.
It is important to clarify that you should already have a basic understanding of what securitization is and of products such as ABS, MBS, and CDOs. Without a background in finance, it will be difficult to grasp most of the book’s content. That said, more than a book, I would describe it as a to-do list for securitization.
The first part covers the origins of structured finance, its peak, and the fundamentals needed to understand each stage of the process. Then, it provides a step-by-step overview of how a securitization is structured — offering enough detail to understand what to expect, what to focus on, and how long each stage might take. As you will learn, securitization often seems more a job for lawyers than for finance professionals, mostly because one must understand the legal nature of the underlying assets. Are they transferable? Is there any legal risk in transferring them off the originator’s balance sheet to the SPV? In the case of loans, is it necessary to inform the borrowers? If personal data are involved, is it legally possible for an external party to review it? I never imagined the process involved such an extensive legal review.
In the final part, the author provides a brief in-house example of a securitization. I must admit, it was not very illustrative — and that is my main critique. As a “to-do list,” the book does a great job navigating through each stage; however, the lack of numerical examples left me with serious doubts. For instance, the book mentions the relevance of the coverage ratio but never provides an example of how to calculate it or how to define each tranche for the issuance. I understand that a deeper explanation might be beyond the book’s introductory scope, but leaving the topic out entirely feels like a missed opportunity.
Overall, I consider it a great book to start learning about structured finance. It is easy to read, easy to follow, and would be a perfect fit for anyone beginning an entry-level position at an arranger bank.
April 10, 2023
Awful book. This book doesn’t know who it’s audience is.
For beginners to Securitization, the book does a remarkably poor job at defining key terms and explaining basic concepts. Hence, a minimum amount of structured products knowledge is necessary in reading this book.
For more experienced securitization readers, the book simply skims the surface of the various stages of Securitizations. Hence, this book is quite useless for people who have the basic knowledge and are looking to gain further expertise.
Strong do not recommend
For beginners to Securitization, the book does a remarkably poor job at defining key terms and explaining basic concepts. Hence, a minimum amount of structured products knowledge is necessary in reading this book.
For more experienced securitization readers, the book simply skims the surface of the various stages of Securitizations. Hence, this book is quite useless for people who have the basic knowledge and are looking to gain further expertise.
Strong do not recommend
November 19, 2024
Short practical introduction to the securitization process: with both theory and a real life transaction. As a grad student getting in structured finance, this book offered summary of key metrics and methodologies in the way a deal is analyzed and structured, I presume this may be helpful to professionals in the field too.
Displaying 1 - 3 of 3 reviews