A commercial loan sale or secondary loan participation is a contract under which a bank sells the cash stream from a loan to a third party, usually without recourse. In accordance with accepted accounting procedures, this no--recourse contract allows removal of the underlying loan from the...

Security baskets and index-linked securities are securities whose values are functions of the cash flows or values of other assets. Intermediaries create security baskets by pooling or bundling more primitive assets such as mortgages, credit card receivables and other loans, or equities as in...

Security baskets and index-lined securities are securities whose values are functions of the cash flows or values of other assets. Creation of these "composite" securities would seem to be redundant since investors can cost1ess1y replicate them. In this paper we study the existence and optimal...

A defining characteristic of bank loans is that they are not resold once created. Yet, in 1989 about $240 billion of commercial and industrial loans were sold, compared to trivial amounts five years earlier. Selling loans without explicit guarantee or recourse is inconsistent with theories of...