What Is Securitization?
The process through which a customer achieves non-recourse funding by selling assets to a bankruptcy-remote SPV. Securitization typically provides the customer with a lower cost of financing. Securitization can encompass many asset classes such as trade receivables, utility receivables, healthcare receivables, auto loans & leases, equipment loans & leases, and credit card receivables. BTMU offers securitization solutions to customers, typically funded through asset-backed commercial paper (ABCP) programs or asset-backed loans provided by BTMU.
Key Benefits of Securitization
- Typically lower cost financing than traditional funding
- Diversification of funding
- Non-recourse to the originator/seller of the receivables
- Early monetization of assets and improvement of cash conversion cycle
- Certain structures can achieve off-balance sheet treatment under IFRS/US GAAP
BTMU's Securitization Business Objective
Our objective is to provide customers with securitization solutions, funded either through asset-backed commercial paper (ABCP) or asset-backed loans (ABL) provided by BTMU. We offer this product exclusively to our corporate and institutional customers.
BTMU's Global Securitization Business
We entered the securitization business in 1992 in the United States and have since expanded this business globally. Our presence in the asset-backed commercial paper (ABCP) market has grown dramatically in recent years.
BTMU is the largest Japanese program administrator, and one of the top administrators of ABCP business globally. As of June 2014, BTMU was the third-largest ABCP issuer in the world on the basis of ABCP outstanding. We provide securitization solutions to more than 450 transactions, with over US$39 billion in funded assets.
BTMU has experience in multiple asset classes, such as trade receivables, utility receivables, healthcare receivables, auto loans & leases, equipment loans & leases, and credit card receivables.
Breakdown of asset classes as of March 2014 (Global Basis)
ABCP League table
10 Largest ABCP Program Administrators - 2Q14 Average ABCP Outstandings
|Administrator||$ Millions||# Issuers||Market Share (%)|
|1||JPMorgan Chase Bank||34,110||6||10.1%|
|3||Bank of Tokyo-Mitsubishi UFJ||26,621||9||7.9%|
|4||Royal Bank of Canada||23,366||6||6.9%|
|7||TD Securities Inc.||13,744||6||4.1%|
|8||Deutsche Bank AG||11,848||5||3.5%|
|10||HSBC Bank PLC||9,901||1||2.9%|
BTMU Global Securitization Network