Securitization of accounts receivables is a financing technique that pools like assets together and, in effect, turns them into a tradeable security. Financial institutions and businesses of all kinds use securitization to immediately realize the value of a cash-producing asset.

Any group of assets that presently or in the future generates income has the potential to be securitized. For many companies that have accounts receivables that are of a homogenous nature, securitization can be a very advantageous financing technique.

Some key points about securitization are:

• Although initial costs of a transaction are high, securitization can raise a significant amount of funds
• Once the basic principles have been learned and an appropriate transaction structure designed, most clients are pleased with this financing technique
• Transactions are generally easy to administer (and to repeat), provided they have been correctly structured

Selecting the advisers with the skills to design, negotiate and support the transaction from a number of different perspectives is therefore critical. Securitization involves many different facets of an originator‘s activities: credit, tax, legal, systems, ratings, banking relationships, project management, accounting and so on. Ensuring that each area understands its role in the delivery of the whole is the key to a successful transaction.