SINCE THE mid-1980s, securitizations have increased at a rapid rate for banks and finance companies and have become an attractive alternative source of financing for corporate America. Securitizations appeal to a broad range of companies, large and small, in many different industries. Loan warehousing transactions are often a prelude to asset securitization, a form of “structured financing.”
Structured financing refers to a method of financing pursuant to which the originating company transfers assets that generate a steady stream of income to a separate entity in order to isolate these assets from the potential financial decline of the originating company, particularly the potential that the originating company could become the subject of a proceeding under the provisions of the Bankruptcy Code.[1]�
