{"id":335862,"date":"2025-05-07T15:40:19","date_gmt":"2025-05-07T10:10:19","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=335862"},"modified":"2025-05-12T20:27:56","modified_gmt":"2025-05-12T14:57:56","slug":"pass-through-certificates-ptcs","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/pass-through-certificates-ptcs\/","title":{"rendered":"Pass-Through Certificates (PTCs)"},"content":{"rendered":"<p><b>News:<\/b><span style=\"font-weight: 400;\"> Pass-Through Certificates (PTCs) have become a highly innovative tool in structured finance, addressing liquidity challenges while offering investors diversified exposure to a pool of underlying assets. <strong>Pass-Through Certificates (PTCs).<\/strong><\/span><\/p>\n<p><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\" wp-image-336431 aligncenter\" src=\"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/05\/Pass-Through-Certificates-PTCs.png?resize=488%2C324&#038;ssl=1\" alt=\"Pass-Through Certificates (PTCs)\" width=\"488\" height=\"324\" srcset=\"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/05\/Pass-Through-Certificates-PTCs.png?resize=300%2C199&amp;ssl=1 300w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/05\/Pass-Through-Certificates-PTCs.png?resize=1024%2C680&amp;ssl=1 1024w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/05\/Pass-Through-Certificates-PTCs.png?resize=768%2C510&amp;ssl=1 768w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/05\/Pass-Through-Certificates-PTCs.png?w=1280&amp;ssl=1 1280w\" sizes=\"auto, (max-width: 488px) 100vw, 488px\" \/><\/p>\n<h2>About Pass-Through Certificates (PTCs)<\/h2>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">These are debt instruments that allow investors to earn returns from a pool of underlying loans or receivables.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">These could include assets such as home loans, auto loans, microfinance loans, commercial loans, or trade receivables.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The loans are bundled together and sold to a Special Purpose Vehicle (SPV) or Trust, which then issues the PTCs to investors.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">These certificates give investors the right to receive payments from the future cash flows generated by the underlying loans.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">PTCs are typically preferred by High Net Worth Individuals (HNIs), Ultra-HNIs, and institutional investors who are looking for investment opportunities that offer better returns than traditional fixed-income products.\u00a0<\/span><\/li>\n<\/ul>\n<h2>\u00a0How Do PTCs Work?<\/h2>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The process begins when a lender, such as a bank or non-banking financial company (NBFC), sells a pool of its loans to a Special Purpose Vehicle (SPV) or Trust. This SPV becomes the legal owner of those loans.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The SPV then issues Pass-Through Certificates to investors, who effectively become entitled to receive the repayments made by the borrowers of those loans.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">As borrowers repay their EMIs (Equated Monthly Instalments), the SPV distributes these payments proportionately to the PTC holders.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">This entire process is known as securitisation \u2014 converting illiquid loans into marketable securities.<\/span><\/li>\n<\/ul>\n<h2>Key Features of Pass-Through Certificates (PTCs)<\/h2>\n<ol>\n<li style=\"font-weight: 400;\"><b>Short-Term Tenure: <\/b><span style=\"font-weight: 400;\">\u00a0PTCs usually have a tenure of 6\u201312 months, ideal for investors seeking short-term returns without long capital lock-in.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Higher Returns: <\/b><span style=\"font-weight: 400;\">They offer better returns compared to traditional options like FDs or some debt mutual funds, for similar risk levels.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Regulated &amp; Transparent: <\/b><span style=\"font-weight: 400;\">Governed by RBI and SEBI, PTCs ensure investor protection, transparency, and adherence to securitisation norms.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Risk Diversification: <\/b><span style=\"font-weight: 400;\">Backed by a pool of loans, PTCs spread risk across borrowers. Credit enhancements further safeguard investments.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Digital &amp; Accessible: <\/b>\u00a0PTCs are issued digitally, allowing online access to documents and a seamless subscription process.<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"<p>News: Pass-Through Certificates (PTCs) have become a highly innovative tool in structured finance, addressing liquidity challenges while offering investors diversified exposure to a pool of underlying assets. Pass-Through Certificates (PTCs). About Pass-Through Certificates (PTCs) These are debt instruments that allow investors to earn returns from a pool of underlying loans or receivables.\u00a0 These could include&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/pass-through-certificates-ptcs\/\">Continue reading <span class=\"screen-reader-text\">Pass-Through Certificates (PTCs)<\/span><\/a><\/p>\n","protected":false},"author":10366,"featured_media":336431,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,12039],"tags":[11872,10501],"class_list":["post-335862","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-factly-articles","category-economy","category-knolls","tag-9pm-daily-factly","tag-live-mint","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/05\/Pass-Through-Certificates-PTCs.png?fit=1280%2C850&ssl=1","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/335862","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10366"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=335862"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/335862\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/336431"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=335862"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=335862"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=335862"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}