What does liabilities securitization mean?

Liabilities securitization is the transfer of liabilities by sale under a written contract in addition to the issuance and offering, through private funding, of bonds of either kind or form, the payment of which takes place a) either by the payments of liabilities transferred or b) by loans, credits or derivatives’ contracts.

Aiming to attract capital from national or international markets, Banks have the right to transfer their liabilities through securitization to special purpose vehicle companies. In such a case, the liability that derives from your loan is transferred to an SPV company. The latter issues bonds, which are redeemed from the proceeds of the collection of transferred liabilities.

In this context, the Bank from which you received your loan, may proceed with the securitization of the liabilities, including your loan. In that case, the liability is assigned to an SPV company, which may transfer the management of the liabilities to a servicer company, one of which is Cepal.