Securitization: Cash Flow on Tap (CFO.com)

"A popular financing technique, sometimes criticized for its off-balance-sheet treatment, may be skewing cash-flow statements too, says a new report."

"Securitization is a process whereby companies sell receivables — money owed by customers, but not yet collected — for cash. The buyer, typically a special-purpose entity (SPE) created expressly for the purpose, raises funds for the purchase by issuing commercial paper backed by the future stream of money to be collected. The commercial paper often attracts a better rate than the company could by issuing CP of its own, because the sale puts the receivables out of reach of the company's own creditors in the event of bankruptcy.'