The size of a securitization program is based on the amount and predictability of futurecash flows on a given pool of assets. These future flows can often support higher borrowing than can be achieved with a traditional loan or bond secured by those assets. In some cases, a contract guaranteeing future payments (such as a franchise, license or royalty agreement) may support a securitization that is larger than the book value of the underlying agreement. Securitizations can typically enable a combination of higher borrowing levels and lower costs than those possible with traditional debt.
