306 Government Finance Statistics Manual 2014
No true-sale securitization,^20 which is schemes
that do not involve a true transfer of assets—
from a macroeconomic statistics perspective—
from the original asset owner’s balance sheet to
that of the securitization unit (see footnote 19)
No asset securitization,^21 which is schemes in-
volving securitization of future revenue streams
that are not recognized as assets in macroeco-
nomic statistics
Synthetic securitization with a securitization
unit,^22 which is schemes involving the transfer
of credit risk only (but not the transfer of as-
sets), through a securitization unit.- If no securitization unit is involved, two types of
securitization are possible:
On-balance sheet securitization,^23 which is
schemes in which the original asset owner is-
sues new debt securities and there is no transfer
of assets
Synthetic securitization without a securitiza-
tion unit,^24 which is schemes involving the
transfer of credit risk only (but not the transfer
of assets), through the direct issue of debt secu-
rities by the original asset owner.
A3.62 True-sale securitization involves debt secu-
rities issued by a securitization unit where the under-
lying assets have been transferred from the original
asset owner’s (i.e., the originator’s) balance sheet to
that of the securitization unit. Th e securitization unit
uses the proceeds from selling the debt securities to
investors to fi nance the acquisition of the assets. Th e
revenue stream from the pool of assets (typically,
interest payments and principal repayments on the
loans) is used to make the coupon payments and
principal repayments on the debt securities issued.
In case of a true-sale securitization by a public sec-
tor unit, the original asset owner’s gross debt remains
unchanged. Th e gross debt of the securitization unit
increases as a result of the securities issued. If this
unit is a public fi nancial corporation, its debt is part
of public sector debt. A resident securitization “unit”
controlled by a government unit that is an SPE but
(^20) Derived from the “fi rst case” of securitization in the 2008 SNA.
(^21) Th e “second case” of securitization in the 2008 SNA.
(^22) “Type 3” schemes in the Handbook on Securities Statistics.
(^23) “Type 1” schemes in the Handbook on Securities Statistics.
(^24) “Type 3” schemes in the Handbook on Securities Statistics.
does not meet the requirements of an institutional
unit is treated as part of general government re-
gardless of its legal status. Such an SPE’s debt is part
of general government’s debt (see also paragraph
A3.61).
A3.63 If no true sale had taken place from a mac-
roeconomic statistics perspective (see footnote 19),
the amount received from the securitization unit by
the public sector unit as the originator is treated as
borrowing, usually in the form of a loan.^25 Th e debt
securities issued by the securitization unit are part of
public sector debt, if the securitization unit is part of
the public sector.
A3.64 No asset securitization involves securiti-
zation of future revenue streams. As mentioned in
paragraph A3.60, the ability to raise taxes or other
government revenue is not recognized as a govern-
ment asset that could be used for true-sale securitiza-
tion. In most cases, it is not the rights to the future
revenue that are used as collateral, but the obligation
of the public sector unit to use a suffi cient amount of
the future income to repay the borrowing in full. If
more income is earned than is needed to repay the
borrowing, the excess is retained by the public sec-
tor unit. So, if “rights” to future government revenue
are transferred to a securitization unit, the amount re-
ceived from the securitization unit by the public sector
unit, arising from the proceeds of the debt securities
issue, is treated as borrowing, usually in the form of
a loan.^26 Th e revenue stream continues to accrue to
government and government uses these proceeds to
repay the loan from the securitization unit. Th e debt
securities issued by the securitization unit are part of
public sector debt if the securitization unit is part of
the public sector.
A3.65 Synthetic securitization involves transfer of
the credit risk related to a pool of assets without
transfer of the assets themselves, either through a se-
curitization unit or through the direct issuing of debt
securities by the original asset owner.
- Synthetic securitization with a securitization unit:
Th e owner of a pool of assets buys credit default
(^25) When both the originator and the securitization unit are in the
public sector, this loan will be eliminated from public sector debt
through consolidation.
(^26) When both the originator and the securitization unit are in the
public sector, this loan will be eliminated from public sector debt
through consolidation.