Securitization is a mechanism that brings multiple advantages.
For the originator
Liquidity - Allows access to liquidity through the acceleration of future flows, reduction of fixed assets or increase in asset turnover.
Indebtedness: There are no restrictions before credit entities, the financing conditions fit the originator's flows, improving the indebtedness indicator. Better financing conditions are also obtained.
Level of Unproductive Assets: Decrease idle resources, improve profitability indexes.
Growth Capacity: Does not require an increase in equity or additional indebtedness, facilitates investment in new projects, for financial institutions there is no increase in technical equity requirements.
Risk Management - Transfer of part or all of the risk to the market, balances the term structure of assets and liabilities, rating of securities independent of the originator's situation, which usually results in a better rating.
For the investor
New investment alternative.
High security securities.
Low risk due to hedging mechanisms.
High risk rating.
For the market
Generates a new area of operations for placement agents.
Promotes market development.
Financial structure that improves the circulation of resources.
Substitutes traditional financial intermediation.