| This research analyzes a long term funding alternative for expansion white maintaining sufficient capital adequacy for a company, especially a bank. The high country risk of Indonesia is not supportive for capital market fund raising activities such as Debt Issuance. Consequently, Bank "X " chooses Asset Securitization as a better solution to their funding problem. This transaction is done by selling usance export bills to a Special Purpose Vehicle Company that issues marketable securities using the underlying asset (the export bills) as a back-up or source of repayments. The purposes of the research are (1) to prove that the cost of asset securitization is lower than the cost of debt issuance, (2) to show the advantages of the Asset Securitization over the debt issuance in terms of asset utilization, leverage and its corresponding risks, (3) to evaluate the impact to the performance of Bank "X" as the originator, and (4) to explore the implementation of the Asset Securitization transaction. Findings of this research suggest that Asset Securitization has lower cost of funds (LIBOR: 129.50 basis points vs. LIBOR: 267.30 bps) and more qualitative advantages as well as better financial ratios such as ROE, ROA, CAR, Weighted Risk Assets. The downside is, however, the complex nature of Asset Securitization transaction and the inadequacy of Indonesian regulation. The complexity of Asset Securitization comes from the fact that, in general, Asset Securitization is a cross-border transaction - involving parties such as legal and financial advisor, trustee, custodian bank, independent accountant. Nevertheless, despite the complexity, the executing company still gains significant advantages in terms of cost and performance; therefore in my opinion, Asset Securitization is a feasible mean to raise funds, especially during the period of turbulent economy such as nowadays. |