NISM Series XV : Research Analyst Certification Exam Notes
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The cash flows accruing from these assets are used to meet the interest and principal repayment obligations on the bonds issued.
The issuer is able to create liquidity in an otherwise illiquid asset by securitizing them. The instruments are credit rated and may be listed on stock exchange
Real Estate Investment Trust (REITs) and Infrastructure Investment Trusts (InvITs) are investment vehicles that pool money from various investors and invest in revenue generating real estate projects and infrastructure projects, respectively.
In the case of REITs, 80% of the asset should be held in the form of real estate asset. Similarly, for InvITs, regulation stipulates that 90% of the unit capital should be invested in revenue generating infrastructure projects
In REITs and InvITs, the trust has to distribute at least 90% of the distributable surplus cash flow to the unit holders.
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