2. Asset Risk Assessment, Analysis and Forecasting in Asset Backed Finance

In asset backed financing structures, security for repayment of the loan is primarily based on the asset as collateral. The structuring of the financing is therefore heavily dependent on the assessment of the current and future value and liquidity of the asset. This differs from corporate backed funding, where security primarily depends on the credit worthiness of the corporate and, thereby, on the corporate credit evaluation. In asset backed financing, the evaluation and risk assessment of the asset necessarily becomes critical for each financing transaction as well as from a portfolio risk perspective. The value and the liquidity of the asset today and in the future is the central element of the credit evaluation process.