Abstract
Today’s realities dictate to Ukrainian companies a management philosophy that requires them not only to maintain their position in the market, but also to increase the efficiency of their operations and development in the context of favorable and unfavorable changes in the market environment, which necessitates significant amounts of financial resources. In the face of global competition and the increased turbulence of the external environment, securitization is one of the alternative tools to attract additional financing as well as to minimize risks by which financial markets can support sustainable finance in the transition to a green economy. The article deals with the essence of securitization as one of the major financial innovations of our time. It is established that this financial mechanism allows to diversify sources of financing, to effectively manage the structure of the balance sheet of the enterprise, as well as to significantly increase the level of liquidity of its assets. It also describes the main types of securitization and their impact on the structure of balance sheet indicators. The practical relevance of the study is that the authors’ highlighted areas of change in financial performance make it possible to make an smart decision on the use of a particular securitization mechanism, considering the purpose of its implementation and the capabilities of its initiators, including in the transition to a green economy. It is suggested for the successful implementation of the concept of a “green” economy aimed at achieving sustainable development goals in Ukraine, using such financial instrument as sustainable securitization through the use of the collateralized loan obligation mechanism.
Highlights
Uncertainty of business environment, constant competition, inflation growth rate, and deficit of available financial and investment resources under the conditions of the lack of own money stimulate economic entities to search for new tools to rise extra financing
Classic off-balance-sheet securitization is based upon a “true sale” scheme characterized by transfer of asset pool to be securitized to a specially established mediator, i.e. Special Purpose Vehicle (SPV)
It is cheaper refinancing mechanism to compare with other methods of getting funding since emitter can issue securities with higher rating and, with lower interest by contrast to long-term loan interest
Summary
Uncertainty of business environment, constant competition, inflation growth rate, and deficit of available financial and investment resources under the conditions of the lack of own money stimulate economic entities (it concerns both financial sector and real sector) to search for new tools to rise extra financing. In this context, securitization as an innovative mechanism of the structured financing on favourable terms making it possible to attract finance while issuing and offering of asset-backed securities becomes extremely important. “green” buildings, sustainable agriculture, etc.), active implementation of sustainable securitization tools is necessary
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