Securitization of Receivables

9 Months Ended

Jul. 31, 2022

Securitization of Receivables

Securitization of Receivables

(5)  Securitization of Receivables

As a part of its overall funding strategy, the Company periodically transfers certain Receivables (retail notes) into VIEs that are SPEs, or non-VIE banking operations, as part of its asset-backed securities programs

(securitizations). The structure of these transactions is such that the transfer of the retail notes does not meet the accounting criteria for sales of receivables, and is, therefore, accounted for as a secured borrowing. SPEs utilized in securitizations of retail notes differ from other entities included in the Company’s consolidated statements because the assets they hold are legally isolated. Use of the assets held by the SPEs or the non-VIEs is restricted by terms of the documents governing the securitization transactions.

The components of consolidated restricted assets, secured borrowings, and other liabilities related to secured borrowings in securitization transactions were as follows (in millions of dollars):

	July 31		October 31		August 1
	2022		2021		2021
Retail notes securitized	$	5,154.1	$	4,662.4	$	5,408.2
Allowance for credit losses		(14.7)		(13.5)		(19.9)
Other assets (primarily restricted cash)		136.2		106.6		112.7
Total restricted securitized assets	$	5,275.6	$	4,755.5	$	5,501.0
Securitization borrowings	$	4,918.5	$	4,595.2	$	5,264.6
Accrued interest on borrowings		3.4		1.7		2.1
Total liabilities related to restricted securitized assets	$	4,921.9	$	4,596.9	$	5,266.7