Definition for : Cross-collaterisation
"Cross-collateralisation" refers to using several different Assets to secure one or several loans. This creates a portfolio effect and reduces the overall Risk. For instance, in a Securitisation used to finance a fleet of 20 aircraft, each aircraft is owned by a dedicated SPV financed by a dedicated loan, and these 20 loans are all cross-collateralised.
(See Chapter 22 Shares of the Vernimmen)
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