What is securitization in SAP FS-TXS - Funding Management?

SAP Term: securitization

• Component: FS-TXS

• Component Name: Funding Management

• Description: Form of funding that converts asset cashflows sitting on an originator's balance sheet into marketable securities ABS, RMBS. The collateral on the receivables if available can be provided to the investor as additional security. The following variants differ according to contracting party who is responsible for structuring the pool: Structuring by originator ABS-O Structuring by SPV ABS-S

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• Key Concepts: 
  Securitization is a process used in the FS-TXS Funding Management component of SAP that allows companies to convert assets into securities. This process involves pooling assets such as loans, leases, or receivables and then selling them to investors as securities. The securities are then backed by the underlying assets, which are used to generate income for the investors. 
  
  How to use it: 
  In SAP, securitization is used to manage the funding of assets. Companies can use securitization to raise capital by selling their assets as securities. This process allows companies to access capital without having to take on additional debt or equity. Additionally, securitization can be used to manage risk by diversifying the company’s portfolio of assets. 
  
  Tips & Tricks: 
  When using securitization in SAP, it is important to ensure that the underlying assets are properly valued and that the securities are structured in a way that meets regulatory requirements. Additionally, companies should consider the liquidity of the securities and the potential for default when structuring their securitization deals. 
  
  Related Information: 
  Securitization is a complex process and it is important to understand all of the risks associated with it before engaging in a securitization transaction. Additionally, companies should consult with legal and financial advisors before entering into a securitization deal.