Securitization
- ACCOUNTS RECEIVABLE INSURANCE
- CREDIT ENHANCEMENT
- CREDIT INSURANCE
Securitization is the sale of a Receivable
Credit insurance can assist in a securitization, also referred to as: bulk asset purchase, or receivable purchase, by improving the asset quality, which may lower associated fees and help get more deals done.
Accounts Receivable Insurance Policy
An Accounts Receivable Insurance policy is when there is a formal securitization of an AR, that is written in the name of an SPV, that will simply buy your receivables with your credit protection from the credit insurance company. When these receivables are aggregated into an SPV, typically before, S&P rating is assigned to the portfolio of the policy, the credit insurance company rating will help the securitized receivables which generally has an improved credit rating. The enhanced securitization, with the insurance company's rating, will lower securitization costs.