Securitization is a way of raising funds by selling receivables, which are then turned into asset–backed loan and securities. This method of financing brings various benefits such as diversification of funding sources and improvement of cash flow.
Structure of a Typical Securitization Arrangement
- The customer sells its receivables to the SPC on a true–sale basis along with necessary perfection.
- The SPC obtains loans from the bank in order to purchase the receivables.
- The SPC makes the payment to the customer as the proceeds for purchasing the receivables.
- The customer’s buyer makes the payment regarding the receivables directly to the SPC on the due date. (The customer may be required to collect the payment from the buyer and deliver it to the SPC.)
- The SPC applies such payment/collection from the customer to repay the loan.
- The use of the above products or services is contingent upon the credit assessment in accordance with Mizuho Bank’s prescribed procedures. As part of this assessment, you may be required to submit certain documents.
- Fees may be charged for using these products or services.
- Please consult an attorney, accountant, or tax accountant regarding any legal matters, accounting issues, or taxation concerns.