ZEDRA moves into the securitisation business

Securitisation is a well-known process in the residential mortgage market. A mortgage lender securitises part of its book – outstanding home loans and the properties they are on – and sells bonds backed by these assets. So the lender raises money from sale of the bonds: a cheaper way to raise money than going to bank. And the assets are off the mortgage lender’s balance sheet.

While mortgage securitisation may be the best-known application, many types of asset can be securitised. This is where ZEDRA can help – and across multi jurisdictions. And as both individuals and companies can have assets securitised, it can be used to manage personal or family wealth as well as financing business.

In Switzerland, which is the main focus of ZEDRA’s securitisation service, an important part of the business has involved car lease portfolios.

Vadim Neumann, ZEDRA Managing Director, Zürich, said: “We have seen companies including AMAG and Emil Frey securitise their portfolios under Swiss rules”. AMAG Leasing completed its third Swiss auto lease securitisation in April, issuing CHF275 million notes to investors.

So what sort of assets can be securitised? Shares and loans; debts; property and broadly speaking, assets which has a certain value and future income – that could include planes and even copyrights.

The securitisation process works like this: the assets to be securitised are moved into a special purpose vehicle (SPV) which can be in the form of a public limited, joint stock or private limited company or a limited liability co-operative. ZEDRA can set up the best ownership structure for the assets being securitised and can provide highly-qualified, independent directors for the SPV.

Ivo Hemelraad, ZEDRA Group Director Corporate, Funds & Legal said: “It is vital when you are dealing with the securitisation of assets that skilled professionals with in-depth knowledge of the legal and transactional frameworks required are appointed as directors of the SPV. ZEDRA can provide the experts needed for this process”.

ZEDRA also provides corporate services needed for the securitisation process, including domiciliation and provision of registered office, bookkeeping; tax and VAT reporting and the handling of all corporate requirements. ZEDRA can also help appoint tax and legal advisers for the securitisation process and, with 500 professionals operating out of 15 jurisdictions can help if the securitisation crosses borders.

Vadim concludes: “Securitisation can be a useful vehicle to manage assets effectively. We are delighted to offer this as a service to our clients”.