Overcollateralization in Corporate Securitization

Ilham Riachi and Armin Schwienbacher

Finance, 2015, vol. 36, issue 3, 7-52

Abstract: This paper examines the amount of assets sold to the special purpose vehicle (SPV) in the course of corporate asset-backed securitization and its impact on the originator?s working capital management. Originators generally over-collateralize the vehicle as a way to enhance the rating of the securities issued. We find that credit risk of the originator, cash availability by the originator and macroeconomic conditions significantly affect the level of overcollateralization. Furthermore, true sale treatment of ABS transaction are positively linked to overcollateralization. Finally, we provide insights into the impact of ABS on working capital management. Our results suggest that ABS initiation and the use of overcollateralization both improve working capital ratios of the originating firm, in particular receivables and cash conversion cycles.

Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.cairn.info/load_pdf.php?ID_ARTICLE=FINA_363_0007 (application/pdf)
http://www.cairn.info/revue-finance-2015-3-page-7.htm (text/html)
free

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cai:finpug:fina_363_0007

Access Statistics for this article

More articles in Finance from Presses universitaires de Grenoble
Bibliographic data for series maintained by Jean-Baptiste de Vathaire ().