Securitization is the process of taking an illiquid asset, or group of assets, and through financial engineering, transforming them into a security.

The practice of pooling various types debt obligations and selling said consolidated debt as bonds, pass-through securities, or collateralized mortgage obligation (CMOs), to various investors  ~ regardless, the result is the same: a new security is created.   

The complexity inherent in securitization can be designed to possess the ability to monitor risk, and that competitive securitization markets with multiple securitizers.  In addition, off-balance sheet treatment for securitizations coupled with guarantees from the issuer can hide the extent of leverage of the securitizing firm, thereby facilitating risky capital structures and leading to an under-pricing of credit risk.

Asset securitization is the structured process whereby interests in loans and other receivables are packaged, underwritten, and sold in the form of "asset-backed" securities. This process enables credit originators to
•    Transfer some of the risks of ownership to parties more willing or able to manage them,
•    Access broader funding sources at more favorable rates,
•    Save some of the costs of on-balance-sheet financing, and
•    Manage potential asset-liability mismatches and credit concentrations

Off-balance sheet securitizations are believed to play a larger role in the high leverage level of alternative finance options.  Securitization has evolved from its beginnings in the late eighteenth century to an estimated outstanding of $10.24 trillion and ABS issuance amounted to $3.455 trillion in the US and $652 billion in Europe.

• Leveraged and management buy-outs,
• Restructuring secure debts and PIPE Finance
• Industrial and Infrastructure projects