I do not understand it.
In: Economics
The other post kept it a little technical. Basically, what a company does is take a bunch of assets like mortgages, leases, accounts receivables, loans, anything that has a somewhat predictable stream of cash flow, and creates a new separate company to sell them to. That new company gets the money to buy the assets by issuing bonds. The interest on these bonds is paid by the cashflows from the assets. The assets also serve as collateral for the bonds too.
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