The data made available to the rating agencies for analyzing the underlying private equity assets of CFOs are typically less comprehensive than the data for analyzing the underlying assets of other types of structured finance securitizations, including corporate bonds and mortgage-backed securities.
These differences tend to relate to the amount of equity sold through the structure as well as to the leverage levels.
Generally, money is allocated into several different tranches by investors based on priority.
From the tranches the funds are then invested into a special purpose vehicle (SPV).
[1] Since the advent of CFOs (c. 2002), there have been only a handful of publicly announced private equity securitization transactions.