Securitisation glossary by Vinod Kothari
Credit enhancement - Refers to one or more initiatives taken by the originator in a securitisation structure to enhance the security, credit or the rating of the securitised instrument, e.g., by providing a cash collateral, profit retention, third party guarantee, etc. Comparable to the various ways of securing a traditional credit transaction. Credit enhancement could be structural credit enhancement, originator credit enhancement or third party credit enhancement.
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