Does your debt portfolio need pass-through certificates?
SummarySecuritization helps reduce default risk on loans by repackaging them into securities. They are complex instruments meant for sophisticated investors.
Here is how securitization helps reduce the risk of default on loans taken by a borrower. Such loans are repackaged into interest-bearing securities and sold to investors, thus spreading the risk thin. That is also what a pass-through certificate, or PTC, does. They are a type of securitization where the investors are paid interest but the final principal depends on the repayment by the borrower. It is considered risky because investors may not get the principal in full if the borrower defaults.