Securitisation: the Irish insolvency framework

Zambelli, Matteo (2020) Securitisation: the Irish insolvency framework. Arizona State University Corporate and Business Law Journal, 1 (1). pp. 154-172.

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Abstract

Securitisation is a financing technique that, if applied under the appropriate circumstances, enables capital utilisation, improves market efficiency and allows a better allocation of risk. This financial tool has evolved over the past few decades and represented a substantial part of Irish and global debt capital
markets.
The key to securitisation is the concept of bankruptcy-remoteness with respect to the securitisation special purpose vehicle (“SPV”). This because SPV will normally be a company which has only minimum outside creditors, and whose sole functions are to acquire and hold the assets and to issue the securities.
Thus, the value of securities issued by the SPV will be determined by the performance of the pool of segregated assets, and not by the continuing creditworthiness of the originator the assets. The separation of the credit risk
of the originator of the assets (“Originator”) and the credit risk of the SPV in this way often enables the originator to obtain lower-cost financing through the
SPV than it would otherwise be able to obtain. As a result, the objective of Irish securitisation structures is to isolate the SPV from insolvency risks. This article
will explore the potential risks that investors in an Irish securitisation transaction may have to face should the underlying assets fail to perform as initially expected.

Item Type: Article
Additional Information: This article is published by the Arizona State University Corporate and Business Law Journal and is available to view at https://cablj.org/wp-content/uploads/2020/01/W2020-FINAL-M_Zambelli.pdf: Matteo Zambelli, SECURITISATION: THE IRISH INSOLVENCY FRAMEWORK, 1 Corp. & Bus. L.J 154, 154–172 (2020).
Subjects: Law and criminal justice > Law > International commercial law
Law and criminal justice > Law > International law
Related URLs:
Depositing User: Matteo Zambelli
Date Deposited: 04 Feb 2020 09:36
Last Modified: 04 Feb 2020 09:51
URI: http://repository.uwl.ac.uk/id/eprint/6730

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