project financing

Do you know what securitization is? Find out here!

The financial practice that bundles multiple assets is common in the modern market. After all, it is a fact that many businesses need investments to sustain themselves over time.  The securitization  is an alternative for those who need to resort to external sources in order to capitalize on your project. It is already recognized as one of the options that best guarantees liquidity for different types of business.

Want to understand more about the subject? Read on and find out what securitization is and how it works in practice. Come on!

What is securitization?

Securitization is an operation that works like project financing. It is done mainly for companies that wish to raise funds from the receivables they already have.

Although it sounds complicated, this operation is quite simple. A financial institution transforms its claims into bonds or securities. In turn, they are available for purchase by investors.

When the lender buys the bond, he pays the amount in cash to the institution and then receives the amounts as they are paid over time, with an additional, which makes the business profitable.

According to the financial specialist of the Cyrela group, Tatiane Osmo, securitization favors investment in the market, “everything that becomes a receivable, you can do the securitization, which is nothing more than anticipating the receivable”.

How does securitization work?

Securitization basically transforms a flow of future receivables into cash-tradable assets, providing new financial funding for companies, construction companies and other agents in the real estate and financial market.

The main ways to trade these securities are through Credit Rights Investment Funds (FIDC) or debentures. Each one has advantages and particularities regarding the profitability provided.

With the FIDC, the company invests its bonds in a fund, looking for potential investors. The advantage of this operation is its profitability, which can surpass the Bank Deposit Certificate (CDI) and has a higher return than other financial products.

Another option, adopted by some companies, is to acquire these assets and change them to debentures traded on the Stock Exchange. This is an operation best suited for fixed income lenders who want to diversify their investments.

What is Certificate of Real Estate Receivables (CRI)?

Securitization basically transforms a flow of future receivables into cash-tradable assets, providing new financial funding for companies, construction companies and other agents in the real estate and financial market.

The main ways to trade these securities are through Credit Rights Investment Funds (FIDC) or debentures. Each one has advantages and particularities regarding the profitability provided.

With the FIDC, the company invests its bonds in a fund, looking for potential investors. The advantage of this operation is its profitability, which can surpass the Bank Deposit Certificate (CDI) and has a higher return than other financial products.

Another option, adopted by some companies, is to acquire these assets and change them to debentures traded on the Stock Exchange. This is an operation best suited for fixed income lenders who want to diversify their investments.