Securitization is a form of financing which involves the pooling and true sale of financial assets and issuance of securities that are repaid from the cashflows generated by such assets. This type of transaction allows financing to be based primarily on the risks of the asset pool rather than solely on the risk of the institution that originated the assets.
Securitization structures are most appropriate for a company that seeks financing but is unable to tap funding sources for the desired tenor and funding cost because of its perceived credit risk. In general, any asset class with relatively predictable cash flows can be securitized. The most common assets include: mortgages, credit cards, auto and consumer loans, corporate debt, and future revenues.
IFC invests in domestic or cross-border securitizations and provides credit enhancement to transactions through funded or unfunded participations, mainly at the mezzanine level. In addition, IFC provides liquidity support, currency and interest rate swaps, and warehouse line facilities to build up asset pools for securitization. Also, the IFC Guaranteed Offshore Liquidity Facility (GOLF) may be utilized for cross-border transactions to achieve higher credit ratings through mitigation of currency transfer and convertibility (T&C) risk.
IFC’s securitizations benefit clients by bringing them improved market access, longer-term funding, a broader investor base, cheaper funding costs, efficient allocation of risk, and improvements in balance sheet and risk management. Client companies wishing to explore a securitization should have a proven track record in their ability to originate and service assets, including substantial historic information on the performance of assets previously originated using a proven credit-scoring system.
Learn more details about IFC's securitizations. 
For details on selected securitization transactions, please see the following fact sheets:
