  Securitization is a financial process where the cash flows of
income-generating assets are sold to institutional investors as securities,
liquidating illiquid assets. This practice presents persistent challenges due
to the absence of a comprehensive mathematical framework for structuring
asset-backed securities. While existing literature provides technical analysis
of credit risk modeling, there remains a need for a definitive framework
detailing the allocation of the inbound cash flows to the outbound positions.
To fill this gap, we introduce the PEAL Method: a 10-step mathematical
framework to streamline the securitization structuring across all time periods.
  The PEAL Method offers a rigorous and versatile approach, allowing
practitioners to structure various types of securitizations, including those
with complex vertical positions. By employing standardized equations, it
facilitates the delineation of payment priorities and enhances risk
characterization for both the asset and the liability sides throughout the
securitization life cycle.
  In addition to its technical contributions, the PEAL Method aims to elevate
industry standards by addressing longstanding challenges in securitization. By
providing detailed information to investors and enabling transparent risk
profile comparisons, it promotes market transparency and enables stronger
regulatory oversight.
  In summary, the PEAL Method represents a significant advancement in
securitization literature, offering a standardized framework for precision and
efficiency in structuring transactions. Its adoption has the potential to drive
innovation and enhance risk management practices in the securitization market.
