Which of the following both provide credit enhancement to a true-sale securitization?
A) reserve account and third-party insurance
B) subordinated tranches and creditworthiness of the originator
C) creditworthiness of the originator and third-party insurance
D) reserve account and interest rate hedging

Question

Quizplus · Accepted Answer

Reserve accounts and third-party insurance both serve as credit enhancements by providing additional financial support to absorb losses, thereby improving the credit quality of the securitization.

Which of the Following Both Provide Credit Enhancement to a True-Sale