What is a sophisticated financing arrangement involving the sale of an entity’s long-term receivables in return for cash that requires the inclusion of a special purpose entity (SPE) to properly execute?
Repurchase agreement
Securitization
Securities lending arrangement
Factoring arrangement
Securitization is a sophisticated financing arrangement involving the sale of an entity’s long-term receivables in return for cash that typically requires the inclusion of a special purpose entity (SPE) to properly execute. Securitization involves the creation of securities backed by the cash flows from the underlying receivables, with the SPE acting as a vehicle to isolate these assets from the seller's balance sheet.
