In a securitization, the special purpose entity (SPe) is responsible for the:
A) issuance of the asset-backed securities.
B) collection of payments from the borrowers.
C) recovery of underlying assets from delinquent borrowers.

Question

Quizplus · Accepted Answer

The special purpose entity (SPe) is responsible for the issuance of the asset-backed securities. The SPe is created for the sole purpose of issuing securities and using the proceeds to purchase a pool of assets. The assets are then transformed into securities that can be sold to investors. The SPe is usually bankruptcy remote, meaning that its assets are separate from those of the originator and the investors.

In a Securitization, the Special Purpose Entity (SPe) Is Responsible