Constructing characteristics of the asset-backed securities employing financial engineering

Abstract

In the state of the world economic crisis the problem of financial instruments creation capable of, on the one hand, managing and redistributing of risks between numerous participants of the financial market, and on the other hand, corresponding investors ’ and issuer’s demands for the profitability and liquidity, gained considerable relevance. In the following article certain aspects of the employment of financial engineering to construct bonds have been analyzed, the author’s definition of financial engineering in the bond market have been given and its methods and instruments have been estimated. The conclusion has been drawn about the influence of main and secondary characteristics of the bonds, that have been modeled in the process of financial engineering, on the generation of cash flows, which are necessary for an issuer and an investor and which bear maximum investment attractiveness.