Is there a difference between “securitizing” and “selling” receivables? And if so, is there a difference in how the cash flows are classified? I’ve seen these cash flows classified as operating in some places and financing in others in the Schweser texts.
in either case that would be financing. I think there might be a difference between securitizing and sale because securitizing involves SPV and implicitly getting a loan with A/R collateral, sale doesn’t implicitly involve getting a loan.
securitizing should be financing cash inflows while selling operating or so I think for securitiziing you still hold the risk of default
maratikus I thought it’s financing only if you sell with recurse
I agree with florin, there is a diff, in that you sell to the VIE or SPE that will then securitize. However, who has the liability of default is entirely dependent upon the terms of the sale, i.e. sale with recourse.
florinpop Wrote: ------------------------------------------------------- > maratikus I thought it’s financing only if you > sell with recurse Makes sense to me.
as long as you hold the default risk should mean that you financed them if you sell them you don’t really care what happens
i agree, I assumed that it was a sale with recourse. i think that’s what typically happens.