Debt Restructuring

Credit institutions, insurance companies and financing companies (Credit Card, Auto Loan etc…) carry a range of liabilities on their balance sheet.

In order to reduce the strain on their balance sheet and improve their Tier1 capital adequacy, these risk carriers have used securisation as an instrument to “sell” their risk to the market (investors).

By securitizing the risk associated with their loan portfolio, these institutions transform a liability into a financial instrument.

The buyer of the financial instrument buys the risk and obtains the rewards / yield associated with the revenue streams attached to this risk.