The Study Of Application And Theory Of The Asset Securitization

Asset securitization, as one of the most important innovations in financial fieldsfor recently 30 years, is characterized by its brand-new financing structure andhigh-effective carrier to meet the needs from various financing groups andinvestors ,and it have already obtained huge success in the United States and manyother countries.Hence, it has become the rapidly-developed money product in capitalmarkets all around the world. Asset securitization originates from revivifying thesecondary markets of mortgage and with a deeper innovation, people regard it as aneffective channel to bridge traditional direct financing and indirect one. It came fromthe U.S. and has formed a trend in capital markets. Since the reform and opened up,rapidly-developing China is longing for capitals, thus this is the time to carry outdevices of asset securitization in our country. Asset securitization seems to regard the assets as support, but is supported withthe cash flow of the assets in fact, this is essence of asset securitization, so thecharacteristic of this paper is to discuss the whole course regard cash flow analysis astrain of thought. First of all, this paper discusses the key principle, namely theevaluation of the cash flow of the basic assets and the analysis of the return and risk,and three major basic principle, namely asset rearrangement principle, risk isolationprinciple and credit promotion principle; then explains operation mechanism with aflow chart. Secondly, proceed from inherent characteristic, this paper analyses indepth the return that asset securitization brings to investor, and the macroscopicalbenefit that asset securitization improves financing efficiency, develops the capitalmarket and spurs economic growth etc. Thirdly, because of the influence of variousunderlined factors, risk is present in asset securitization, this paper analyses the keyfactors that affect the risk of asset securitization, especially prepayment risk. Finallythe paper studies the cash flow of the basic asset and the securitization products,especially the influence of the prepayment behavior.