Dealing with seller's risk

In contrast with collateralised debt obligations (CDOs), which are now considered as vanilla products, asset securitisations exhibit a large variety of structures and underlying assets. On top of that, securitising assets induces another type of risk, namely seller's risk, which is a crucial issue in the rating agencies' criteria, especially for short-term assets such as trade receivables (Standard & Poor's, 1999). Debtors' risk and seller's risk are interdependent variables and, as far a