CMA Final · Strategic Financial Management · Securitization
In a securitization transaction, the entity that sells its loan receivables to a special purpose vehicle (SPV) so that they can be converted into tradable securities is known as the:
The seller of the receivables to the SPV is called the originator. It originates the loans, transfers them to the SPV for cash, and the SPV issues securities against the pool. Obligors are the borrowers, while servicers collect payments and trustees protect investors.
- AOriginatorCorrect
- BServicer
- CObligor
- DTrustee
Explanation
The originator is the entity that holds the original receivables and transfers them to the SPV. The obligor is the borrower who owes the underlying debt. The servicer only collects payments and the trustee protects investor interests.
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