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I was reading a past paper and came across this statment but couldnt understand it and can you please briefly explain it to me
”The securitisation means that the company is not longer concerned with the risk that the level of earnings from the properties will be insufficient to pay the finance costs.RISK HAS BEEN EFFECTIVELY TRANSFERRED TO THE LOAN NOTE HOLDERS.”
I got the first part of the sentence but i cant understand second part that risk has been transferred to loan note holders?How?
Does it means that in securitisation process if the income from asset decreases than loss would be borne by the loan note holders?
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