The securitization of financial assets represents an important new tool in the financial markets of today. The basic premise is a simple one: Net value may be created by redistributing risk, and producing custom, liquid instruments from nooliquid assets.

This technique is now increasingly being applied to the transformation of the nonliquid portions of a corporation's balance sheet into liquid, saleable securities, a potentially effective means of raising capital. Today, the asset securitization market is over $500 billion and growing rapidly.

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