Electronically negotiated asset securitization

摘要

An electronic negotiation auction platform derives final market pricing for and assembles the investor pool to fund a borrower's loan request or to sell an existing debt instrument. The platform conducts the auction in two phases. The first phase involves junior lienholders, whereas the second phase involves senior lien holders. Phase I comprises establishment of a purchase price by junior lienholders (B) tranche given minimum return information. Phase II comprises subscription of the (A) tranche which, now has a defined value and full range of information to consider the safest of the investment vehicles for this asset. Competition among investors desiring to participate in the (A) tranche results in a lower yield for the (A) tranche and a higher yield for the junior lienholders if the (A) tranche is oversubscribed. This extra yield is passed on to junior lienholders, serving as incentive to participate in the junior tranche.