Seasoning
From Open Risk Manual
Definition
The Seasoning of a Portfolio of Receivables (also in a Securitisation context) denotes the time period over which newly originated receivables have been observed.
This time period is important as the full behavioral profile of a given pool of borrowers may only reveal over a time period long enough to include, e.g. a range of different (macro)economic environments. The effects of seasoning could be a drop in prepayment / default rates caused by aging of the portfolio.
Details
Seasoning of a pool of receivables allows (better) estimation of risk factors and risk outcomes such as the Default Rate or Prepayment Rate
Variations
None
Issues and Challenges
None
See Also
None
Disclaimer
- This information is provided as is without any representation of correctness, completeness or suitability for any purpose whatsoever. Refer to actual securitisation prospectuses for the definitive terms applicable in each case
- Definitions, detailed descriptions and other content may change at any time as further examples or relevant aspects are introduced
