




































American Research Journal of Economics, Finance and Management 

Volume 11 Issue 1, January-March 2023 

ISSN: 2836-9416 

Impact Factor: 5.57 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

1 | P a g e  

 

ASSET SECURITIZATION: TRANSFORMING ABSTRACT 
PROPERTIES INTO FINANCIAL GUARANTEES 

 
 

1Dr. Mohammad Hassesi, 2Dr. Saeed Rohollah 
1DBA candidate Necmettin Erbakan University Turkey 

2Ph.D. candidate, Islamic Azad University Iran 
 

Abstract: The financial landscape witnessed a significant transformation in the 1980s with the 
emergence of a groundbreaking innovation known as the securitization of assets. This innovation 
fundamentally reshaped the role of financial intermediaries within the capital market. Securitization 
involves the process through which financial intermediaries, such as investment banks, package and 
sell property assets from owners to investors in the form of securities. During this process, the 
property assets are detached from the owner's balance sheet, and funds are raised directly from 
investors who acquire tradable instruments representing a claim on the underlying debt, independent 
of the original owner. The concept of asset securitization originated in the United States during the 
1970s and has since become a pivotal and highly valued financial product in global capital markets. 
Keywords: Asset securitization, Financial innovation, Capital market transformation, Investment 
banks, Securitization process 
 
 
1. Introduction  
The most important financial innovation in 1980’s which strongly affected the role of financial 
intermediaries in capital market, was changing properties into securities. This is a process in which 
financial intermediarie ssuch as investment banks sell properties of the owners through securities, 
directly to investors. In this process, properties of the owner is separated from its balance sheet, and 
instead providing funds is being done by investors who buy an exchangeable tool which is an index of 
above-mentioned debt, without referring to the first owner. Concept of changing properties into 
securities was first created and acquired in the U.S. in 1970s. This technique was accepted as a very 
important and valuable product in capital market during the past decades.   
2. Abstract fundamentals& background review   
2-1. Concept of securitization: The first recorded case of changing properties into securities, was 
done by National    
Institute of Governmental Mortgage Loans in the U.S. in 1970. The institute expanded "pass-through 
security" which was a kind of securities based on mortgage loans and runs war soldiers' affairs, 
guaranteed by mortgage loans of Federal Inhabitancy Office (Greenbaum &Thakor 1995).Pass-through 
security based on loans are symbols of direct possession in a mortgage loan basket which are the same, 
concerning due date, profit rate, andthe same features. In this process, a portfolio is being sold to a 
warrantor, and possessive certifications are directly being sold to investors: in a way that each 

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 11 Issue 1, January-March 2023 

ISSN: 2836-9416 

Impact Factor: 5.57 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

2 | P a g e  

certification shows a debt against all properties. Regarding concept of pass-through security, 
professionals have presented some definitions, however all suggest that above-mentioned certificate is 
a document symbolizing "having the right of exact immediate profit of future cash flows of a property" 
(Mojtahed [et al],2011).   
Consequently, a person who buys securities, has certainly the access to that part of properties which 
has already bought, based on the definition of possessions on its future cash flows benefits, and though 
until he has not sold those securities, he has the right to the future benefits of the property. However 
such rights is necessarily goes to the owner and the certificate of its holder.  
  
2-2. Definition of securitization: Before 1980’s, the concept of securitization used to be applied to 
define process of replacing securities' issuance in order to raise finance from banks, though loan is the 
borrowers commitment to those lenders. Economists have called it (providing financial resources) 
disintermediation (Kendal & Fishman, 2000). Today securitization has more particular definition 
according to what has been mentioned by Lampkain (1999).  
Recently, the expression of structured financing has been used in raising finance. Structured 
financing is a process in which all sold properties are recollected and regained. Securities' profit 
presents cash flows income and interests issue done loans for third party investors.Fabbozi, Davis, 
&Chadhori (2006) pointed out that this expression covers a wide range of financial market activities. 
Here is their applicable definition for structured financing: "…these techniques used when 
necessary for publisher of property holder, whether related to financing, risk transferring, or any other 
needs cannot be prepared as a product or an accessible tool. So, in order to meet this demand all 
available products and techniques should be designed as a customized product or process. Therefore, a  
Structured financing is a flexible financial engineering instrument". 
According to this definition, structured financing includes not only securitization, but also 
structured credits. The following definition is published by International Liquidation Bank in relation 
to structured financing in 2005: "Structured financing instruments can be defined through three 
main features:  
1. Aggregating capital (based on cash funds)  
2. Scanning debts to be supported by properties (this feature distinguishes between structured 
financing & traditional securitization instruments)  
3. Cutting credit risk connection of deposited properties from promoter credit risk which is 
normally done through a mediator organization SPV that is independent and has a limited life. (Quoted 
by Rah Neshin & Riahi, 1393, p.20).  
3- 2.General Process of Changing Properties to securitization:  
In this process, a company or an institute which needs finance, establishes a company having a special 
purpose and sells a part of its properties to a SPV (Special Purpose Vehicle) which has future cash- In- 
flows. SPV issues debt securities (ABS = Asset Backed Securities) in order to provide necessary fund to 
buy above-mentioned financial properties and then presents it to investors. Then SPV pays money 
which has received from selling debt securities to main company in order to buy financial properties. 
Investors who have bought such instruments may take restitution received from future cash-In- flows 
came from SPV financial properties. This process is shown in  

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 11 Issue 1, January-March 2023 

ISSN: 2836-9416 

Impact Factor: 5.57 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

3 | P a g e  

 
  
From the issuers’ point of view, target property or cash flow would be paid separately due to balance 
sheet separation and from the investor's point of view; separation of property and future cash-In- flow 
would be to secure exchange against potential bankruptcy of securities' issuers and credit risk of 
property. So investors prefer minimum risk to properties risk or debts of securities' issuers.  
4- 2.General Process of Changing Properties to securitization:   
In below table the advantages of securitization based on various beneficiaries are presented.  
  

finance applicants  Banks & Financial 
Institutes  

Government  

1. balance sheet separation and 
cash equivalent replacements  

1. More  investor accessibility  1. More effective finance 
methods  

2. Making new receivables by 
securities publisher  

2. ROE increase, more balance 
sheet items allocation to other 
needs   

2. Better risk management and 
consequently improving 
financial policies and 
facilitating new  financial 
market creation  

3. Reducing investment costs 
for publisher  compared to 
traditional securities  

3.Better ALM  3.Variaty of financial properties 
and   
focus  on  optimized 
 usage  of resources  

4. ROE increase , through using 
less capital  

4. Credit risk, liquidity and 
interest rate decrease   

  

figure 1.   
  
   
     

Credit Promotion                           Commission   
  
Securities   Received commission     Received Commission       
  
  
  

       
            Cash                       Cash                                            Cash   
  
         Cash Flow                             Commission   
  
  
  
  

Figure 1: benefit bonds   

Credit  

Special Purpose    
Vehicle (SPV)    

 

Investors   
Company     

improbable to  
Bankruptcy   

Bank   
) ( promoter   

Cash Flow  

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 11 Issue 1, January-March 2023 

ISSN: 2836-9416 

Impact Factor: 5.57 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

4 | P a g e  

5. Increasing & diversification 
of financing methods  

5. Economy of scale    

6. ROA increase, through 
reducing finance costs   

     

7. Decreasing credit risk facing 
through minimizing some of 
high risk properties out of 
company balance sheet and or 
replacing them with low risk 
properties  

     

8. Adjusting financial resources 
of some properties through 
reinforcing financing methods 
with longer due dates compared 
to other markets  

    

  
Table 1: Advantages of securitization on various beneficiaries   
5- 2.Value of Published Bonds in Iran & throughout the World: There is no exact 
estimation of debt securities  

 
Graph 1: Amount of issued debt securities from 1990 to 2015 in the U.S numbers in billion 
dollars (Statista 
As seen, within 25 years 13,710 billion dollars debt securities have been totally issued in the U.S. 
Compared to total amount of published bonds (13,710 billion dollars), amount of issued bonds in first 
ten years of mentioned period (77 billion dollars) has been about 0.05% of total bonds. This increase 
shows approval, acceptance, & application of securitization for financing. In Iran, the first bond has 
been issued in 2005, first Ijarah Sukuk in 2010, first Murabaha Sukuk in 2012, and finally a listed 
company has issued Istisna & a bank published the first mortgage – backed securities (MBS) in 2015 

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 11 Issue 1, January-March 2023 

ISSN: 2836-9416 

Impact Factor: 5.57 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

5 | P a g e  

through the Securities & Exchange Organization permit. In table 2, value of issued bonds in Iran shown 
from 2005 to 2016. 

Type of 
securities  

Number  
of 
issued 
Bonds  

Total  
Amount  
of 
issued  
Bonds  

Buyers  
   

having 
 non-
bank 
Guarantee  

having bank & 
nonbank 
Syndicate  
guarantee  

having 
Guarantee  

bank  

Government  28  92,431  59,131  7  1  20   
Ijarah  32  85,055  77,251  9  2  21   
Murabaha  10  28,565  26,564  3  0  7   
MBS  1  3,000  3,000  0  0  1   
Istisna  1  1,629  1,629  1  0  0   
Total  72  210,680  167,575  20  3  49   

Table 2: Value of Issued bonds in Iran capital market (billion Rials), Source: The Securities & Exchange 
Organization (2017)  
3. Brand and Its Different Types:  
According to definition, brand or trade mark is sign, mark, design, or a combination of these, which are 
used to identify products or services of seller or a group of sellers and to distinguish between these 
products or competitors services. Trade mark (brand) is to identify and distinguish seller or producer. 
Actually, the trade mark (brand) is a seller permanent commitment to present a collection of special 
features, advantages, and services to buyers. Trade mark can be a symbol of some more complicated 
cases such as product identity, product character, and culture of how to use a product as well as 
personality of product user. Brands are invisible properties of companies which increase final value of 
product in costumers' point of view and also will result in added value for investors and consequently 
increase company income. Brand are various, which some of its famous ones are as follows:   
1. Trade sign (Brand): It is a name, an expression, a symbol, a design or a combination of them that 
tends to identify product and services of a seller or a group of sellers and also to distinguish between 
these and other competitors.  
2. Brand Name: That part of a sign which can be stated verbally. For instance, Fiat car, Sony TV, 
Bata shoes, etc.  
3. Brand Mark: Part of a brand name that can be recognized but cannot be imitated. For instance, 
a symbol, a design, or color of a particular letter.  
3- 1.Value of Top Brands in the World:  
Based onlatest estimations in Forbs & Interbrand sites, value of 100 top global brands in 2017 has been 
about 1.948 billion USD according to various industries which is summarized in table 3. Based on 
above-mentioned table, 42% of all top brands' value (approximately 810.7 billion dollars) belong to 
Telecommunication & Information Technology and Related Industries. Services and entertainment 
industry goes to second class having 14% of total value of top famous brands in the world. If services 
are considered as technology and other welfare & financial services, then total value of top brands in 
this field reaches to 63% of all brand values. These companies such as Apple, Google, & Microsoft have 

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 11 Issue 1, January-March 2023 

ISSN: 2836-9416 

Impact Factor: 5.57 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

6 | P a g e  

respectively the highest brand value as 184, 140, & 87 billion dollars, each one has 20% of 100 top global 
brands' value.  

Brand 
Income 

Brand 
Value 

Industry 
Bilion 
Dollar 

Bilion 
Dollar 

1589,2 810,7 Technology&Information Industry&Telecommunication 

394,8 278,3 Services(entertainment,restaurant,transportation,packing,…) 

979,4 197,8 Automobil & related industries 

729,9 150,4 Financial services 

1011,5 119,5 Retail 

614,5 393,6 Other industries 

5337,6 1948,3 Total sum of industries 

Table 3.Value & Income of 100 top companies of the world in 2017 by Forbes  
According to the estimations, regarding amount of incomes made through brands, we can say total 
income via 100 top global brands in 2017,were 5,337.6 billion USD. This number shows that income 
gained by brand has been 2.7 times more than the value of top global brands. So, we conclude that 2.7 
units of income have been made for each unit of brand dollar. Table of value and grade of top global 
brands is presented below. Interbrand valuations of top global brands (p.9)  

 

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 11 Issue 1, January-March 2023 

ISSN: 2836-9416 

Impact Factor: 5.57 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

7 | P a g e  

  
3-2. Top Brands in Iran:  
  
No exact and valid estimation has been formally published yet regarding brands and their values and 
also income gained through brand in Iran. According to what has been mentioned in 10th National 
Festival of Champions of Iran Industry, Tadbir Smart Study Group, has selected 300 top brands of Iran 
to be evaluated and classified in 3 groups of A, B, & C which estimated their approximate value as 300 
thousand billion Rials. However, according to some informal assessment, some of top and known 
Iranian brands (as in table 4) are considered as pricing basis (at the time of assignment).  
  

NO  Company’s name  Value (Billion IRR)  Announcer source  Valuation Year  
1  Iran Air  15000  Private 

Organization  
2011  

2  Iran Khudro  4000  Iran khudro  2014  
3  Persepolis sports club  2900  Private 

Organization  
2014  

4  Esteghlal sports club  2900  Private 
Organization  

2014  

5  Iran Saderat Bank  5035  Benker Tractate  2014  
6  Iran Melli Bank  4293  Benker Tractate  2014  

Table 4: Brand value of some top companies according to latest assessments. IRR means Iranian Rials( 
1 USD =43,295 IRR) 
3-3. Necessity to Use Brand in Financing Human Capital-Based Companies:  
In securitization process, promoter for financing issues new bonds based on his properties, which are 
mostly claims and mortgage loans. Nowadays, knowledge-based companies have an important role one 
conomy, and technology-based companies specially play an important role in this area. As it was 
mentioned in table 3, 63% of global brands' value belongs to technology and services sector. An 
outstanding point is the dependency to human and knowledge based companies which results in 
gaining more profits and create and promote values. The value of brand might be the reflection of the 
role of human capitals in such companies. In fact, the value of brand can reflect the ability and capability 
to provide future income gained through its effects on the market. Leading companies do not usually 
depend on their physical properties but on their human capitals. Ongoing companies are not able to 
have an access to financial resources to meet their demands, so they may face with some limitations. 
Therefore,we suggest that these companies use their most important and valuable property (brand), for 
financing. By expanding these kinds of activities and making more values to the companies, the value 
of brand will be strengthened.  
Benefit Bonds:   
 Benefit can be considered as continuous earnings derived from particular property or the right to use 
services or other transferable rights which can the basis to issue benefit bonds. Benefit bond (Manfaat 
Sukuk) is a kind of securities that shows in-common possession of its holder for specified amount of 
future benefits derived from properties or presents particular services and any specified transferable 

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 11 Issue 1, January-March 2023 

ISSN: 2836-9416 

Impact Factor: 5.57 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

8 | P a g e  

rights in a certain period of time. These bonds are exchangeable in stock exchange or other markets out 
of it. In these bonds, the investors are the owner of benefit derived from a special property which is a 
basis to issued bonds. Based on earnings received from this specified property, the investors' profit or 
loss would be defined. Benefit bonds are one of various securities which are based on rent contract and 
are exchangeable in secondary market. Benefit bonds are being used in different ways: these bonds can 
be used as assignment of other future benefits received from property or long-lasting property. Benefit 
bonds also include a wide range of services and public facilities which enjoy future benefits of such 
services. These services may contain the following:  
1. Services related to affairs such as power (electricity, gas), cleaning garbage, and post services,  
2. Phone, radio, air lines & bridges,  
3. Intercity and suburban railway services  
4. Ports and roads services  
5. Hotels, restaurants, & public health and training services.  
One of these services or benefits that can be trusted to issue benefit bonds is benefit received from brand 
name of well-known and international companies. In figure 1, operational type of bonds is presented.  
5 Commission contract  

 
Figure 1: Securitization Process  
Benefit bonds are classified in 3 groups:  
1. In this type such as highway bond, bond holder has to wait till the due date of bonds to gain all 
future benefits derived from the property.  
2. In this type such as hotel bond, bond holder does not have to wait till the due date of bonds to 
gain all future benefits derived from the property.  
3. In this type, the right to use services or other transferable rights would be the basis to publish 
such as the right to use certain type of media for instance in TV commercial breaks.   

  
          

  
  

                                                    1   Publishing benefit Bonds                                                  3  Rent Contract   
  

                                                           Collecting Funds                                                             4 Pay Money 2   
  
  
  
  
  
  
                                                            Pay in 6 - part payment during bonds life    
  
  
  
  
  

  

Investors    
Intermediator   

 

Promoter  

( Agent )   

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 11 Issue 1, January-March 2023 

ISSN: 2836-9416 

Impact Factor: 5.57 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

9 | P a g e  

3-5. Elements of Benefit Bonds:   
These elements include promoter (or issuers who issue bonds), warrantor (legal entity who warrants 
paying related amounts of the bonds), trustee (reliable auditor institute of stock exchange which is 
responsible for ensuring precision and accuracy of promoter operation against made benefits), selling 
agent (legal entity who sells benefit bonds on behalf of mediator), & paying agent (central depositary 
company of securities and funds liquidation). Promoter may be one of below explained ones having 
related specifications: 
A. Joint stock corporations or a non-governmental organization or an institute:  
* Being the holder of bonds should have been already deserved to the bond’s rights.  
* Auditor and his promoter's observations regarding financial statements within last two fiscal 
years should not be adverse or disclaimer.  
B. Governmental organizations or municipalities. 
3-6. Economy analysis of benefit bonds from companies' points of view:  
A.Since some companies can receive needed capital to expand their activities through these bonds, this 
instrument may have a positive effect on growing some parts of economy. B. If primary and secondary 
markets of benefit bonds move toward a clear and vivid competition, restitution rate of bonds will move 
toward real added value and will help producers to enjoy a fair distribution of their benefits. Moreover, 
this instrument can influence profit rate to a real restitution rates of capital as an agent of economic 
added value. C. These companies having a brand can use Brand Benefit Bonds. Using such bonds 
may motivate companies to try more in order to develop their services and to promote quality of services 
and branding.  
3-7. Secondary Market of Benefit Bonds: 
Benefit bonds holders deserve the right to use properties' benefits or services of service companies 
directly in their specified due dates or they can assign them to benefits & services' applicants till their 
due dates. So these bonds have a lot of advantages for their holders, first they are a kind of reserving 
benefits and services in a specified time based on which a person can make his plans, second, using 
services and benefits through these bonds would be in lower cost, and third, whenever the bonds holder 
needs cash flow or disregards using services and benefits, he can assign bonds to another person. 
Above-mentioned advantages cause supply and demand and then to be formed for benefit bonds. If 
benefit bonds present clearer services and benefits and if bonds issuer respects more to bonds holders' 
rights, secondary market will be booming more. Price of these bonds and profits derived from their 
transactions depend largely on many factors such as property holder and service companies' credit, face 
value of services and benefits, restitution rate of similar financial tools, place and time of presenting 
services and benefits.   
3-8. Requirements of Benefit Bonds:    
*Promoter is responsible for all costs related to issuing of benefit bonds. *Buyers through buying bonds 
assign an irrevocable power of attorney to SPV to take any steps concluding necessary contracts with 
promoter in order to enjoy benefits of bonds and collect funds received from them. Subject of bonds 
issuance should be mentioned in documents which buying bonds means acceptance of SPVassignment 
and they would be valid and irrevocable till due date final liquidation of bonds. *Promoter should take 
necessary steps in order to use properties which make benefits of bonds, to present services and to take 

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 11 Issue 1, January-March 2023 

ISSN: 2836-9416 

Impact Factor: 5.57 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

10 | P a g e  

advantage of other transferable rights of benefit subject. Promoter is responsible for using benefits of 
bonds, presenting services, & taking advantage of other transferable rights, receiving earnings resulted 
from benefits and paying them to SPV. *Before issuing bonds, promoter is obliged to design his financial 
and accounting system in a way that recording and reporting detailed operation would be easily and 
clearly possible, regardless of other operation and activity of promoter. 
4. Brand Benefit Securities  
It is essential that there exists an asset in securitization, and as this kind of securitization is our model, 
in the first step, the brand must be registered and evaluated as an asset of the issuer. Due to the general 
method of securitization, the structure of Brand Benefit Securities, BBS, would be suggested as shown 
in figure 2. According to the suggested structure, SPV is needed who is responsible for BBS payment at 
the due date, to the owner of the asset (main owner of the asset that the BBS must be returned to, at 
due date). After registering the designated brand in intellectual property market and evaluation of it, 
the owner should transfer the brand right (under a specific contract)  

 
In reference with the transferring brand right, the promoter (agent) would pay SPV benefit for the 
periodic usage of brand benefit, and the SPV will distribute it among investors as a profit, on behalf of 
the promoter (agent). In order the assurance of conforming the conditions of Brand right Transferring 
Contract, a designated organization thatis in charge of inspection the quality and quantity of products 
which produced under the designated brand will be appointed that subsequently reports the results of 
the inspection to trustee. As of due date of BBS, the designated brand would be returned to the issuer 
and the initial investment would be returned to investors as well.   
If the issuer do not fulfil its commitment during the BBS period and at the due date, in order to protect 
investors’ rights, the benefit of the brand will be transferred to others via intellectual property market 
based on the above mentioned contract.  
4.1 The roles and responsibilities of auditing in BBS  
As explained before, brand is one of intangible assets which has been formed in public minds as a result 
of reputation derived indirectly from some specific aspects of products among consumers, customers 
and local and international markets. The value of a brand is largely dependent on the quality of the 

to a SPV. Then the SPV should issue BBS based on the brand and can sell it to potential investors.   
  

  
  
  
  
  
  
  
  
  
  

  
  

  
  

SPV 
  Investors   Promoter  

) agent (   

Brand   

Cash   

Brand Benefit  
securities   

Cash   

Inspecting  
unit   

Trustee   Audition report   

Payments of brand benefit   

Investors Benefit   

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 11 Issue 1, January-March 2023 

ISSN: 2836-9416 

Impact Factor: 5.57 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

11 | P a g e  

reputable products, providing aftersales services and continuity of its maintenance, and perseverance 
of its market share related to the designated products. Decline in the quality of product and services 
and also new brands penetrated into market, as rivals due to which the market share of the brand might 
decrease, are considered as operational risks to which BBS owner are exposed to. Hence, in order to 
manage (minimizing) these risks, the existence of an auditing unit who is in charge of assuring that the 
value of brand is being protected till BBS due date and promoter (agent) fulfil all its commitments in 
usage of brand and reassuring financial regulations.   
The auditing institution tasks are as follows:  
1- Assuring the compliance of quality of the products and BBS issuer services in accordance with 
transferring brand right contract;  
2- Assuring that the amount of products is in accordance with the scheduled plan and transferring 
brand right contract;  
3- Monitoring the brand reputation among consumers and customers;  
4- Reporting to investors and trustee;  
5- Monitoring, acquiring plan of action and amendments to preventing and adjusting the brand’s 
seat and the related investors as well.    
4.2 The Scope of BBS Application  
According to its special aspects, BBS applications explained as follows:  
1- Financing for the companies holding a reputable brand;  
2- Financing for knowledge based companies, which are rely on their human based capital, not on 
physical  assets, for instance, companies in IT, ICT and high-tech;  
3- Financing for companies based on their employees skills, like sport clubs.  
4.3 The benefits of BBS   
  
BBS has a wide variety of benefits from the point of view of issuer, Promoter (agent) and the Market, 
which has been shown below:  
1- Application of intangible assets of companies (in this case Brand) in order to raise fund and to 
develop companies, specifically the ones which based on human resources (knowledge and skills);  
2- Decreasing financial costs of human capital based companies;  
3- Using the capacity of social reputation of brand to raise fund, especially using social potential of 
advocates of sport clubs;  
4- Protecting brand seat in the market and facilitating the act of developing brands;  
5- Evaluating and updating the brand regularly and permanently;  
6- Creating the possibility if developing a brand and its intellectual assets in the related market.  
4.4 The risks of BBS  
Related risks to BBS are as follows:  
1- The value of BBS is highly depended on the value of brand itself, its volatility and the possibility 
of loss or failure in brand value.  
2- The value of brand is strongly related to the issuer management.  
3- Market share of the products or services on which BBS is issued can easily affect the value of 
BBS.  

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 11 Issue 1, January-March 2023 

ISSN: 2836-9416 

Impact Factor: 5.57 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

12 | P a g e  

4- The dependency of BBS value on the life cycle of the product when it’s not revised and modified 
after maturity stage. 
4.5 To ols and ways of BBS risk management  
Due to the fact that BBS is a new structured finance method, it is necessary that some new 
measurements defined and designed in order to protect diversified stakeholders’ rights so investors’ 
fears of their capital decreasing, minimized and BBS applications developed. The tools and risk 
management methods of BBS arestated in table 5 below. 

General 
Risks  

Special Risks  Risk management 
methods  

Tools  

Operational 
risk  

producing goods and 
services not based on 
the schedule   

Inspecting and 
auditing unit  

Contractual regulations, periodical 
reports on the quantity of products  

quality volatility of 
products and services  

technical inspection  periodical reports on the quality of 
products and services  

providing services to 
the client  

technical inspection  Periodical and annual reports on 
the quality of products and 
services  

Credit Risk  dishonoring basic 
capital  

Trustee and 
guarantor  

Contractual regulations on 
transferring the Brand benefit 
through intellectual property 
market  

lack of commitment to 
pay  
benefit to investors  

Trustee and profit 
guarantor  

Contractual regulations on 
transferring the Brand benefit 
through intellectual property 
market  

dishonoring basic 
capital by promoter 
(agent)  

guarantor  Contractual regulations on 
transferring the Brand benefit 
through intellectual property 
market  

Market 
Risk  

volatility of brand 
Value  

Trustee and auditing 
unit  

Monitoring the quality, quantity, 
market share, brand reputation 
and reporting of these items.  

  
5. Conclusion and suggestions  
In this paper, we only focus on a new model on securitization based on the benefits of brand for 
financing, but the followings are urgently needed to issue the BBS:  
1- Reviewing and evaluating the laws and regulations, social and economic effects of BBS;  
2- Reviewing the BBS execution in those companies holding the brand;  
3- Reviewing the BBS execution in sport clubs;  
4- Reviewing the BBS issuing by Venture Capitals, ingenious investments and knowledge-based 
organizations; 5- Reviewing the BBS facilitating through capital markets.   

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 11 Issue 1, January-March 2023 

ISSN: 2836-9416 

Impact Factor: 5.57 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

13 | P a g e  

References: 

Jafarpisheh, Khalil, The Secrets of Branding, 2012, first edition, Isfahan, Amookhteh Publication; 
Tehran Stock Organization annual Report, 2017; Tehran Stock Organization, Islamic Survey and 
Development Department, 12th Bulletin; Iranian Privatization Organization, 2012, Iran Airline 
Evaluation;  

Fabuzzi & Chadhori (2006), translated by Rahneshin, Ali & TajlirRiahi, Hamed, 2014, securitization, 
Tehran, Termeh Publication;  

Feisal Ahmad Monjo, translated by Karimi, Mojtaba, 2009, Asset Securitization: Important execution 
for Islamic Banks; Ravand quarterly, 55th Bulletin, Page 185;  

Greenbaum, and Thakor, A. (1995). Contemporary Financial Intermediation. New York: The Dryden 
Press; Kendall, Fishman, J. (2000)," a Primer on Securitization", USA, the MIT Press;  

 (Mojtahed& colleagues, 2011); www.Iraneconomist.com; www.Statista.com; www.forbes.com; 
www.Interbrand.com  

mailto:contact@americaserial.com
mailto:contact@americaserial.com
http://www.statista.com/
http://www.forbes.com/

