Title: Corporate Loan Securitization: Selected Legal and Regulatory Issues
Abstract: The past three years have witnessed significant developments in the use of securitization as a financing technique. A form of financing that was initially used to finance relatively simple, self-liquidating assets such as mortgage loans has expanded in its application, and is now frequently employed in more complicated financing structures. For example, risk in project lending is now being securitized, and, more importantly for the purposes of this Article, securitization is being employed by banks and finance companies to finance more individualized credits such as corporate loans. The resulting securitization structures are complicated, primarily as a result of the requirement within a securitization transaction to produce a structure that insulates investors against a multiplicity of risks. Credit risk, market risk and liquidity risk are all possible consequences, and when retained by the original lending institution, would be managed on an institutional basis, and supported by the institution’s equity base. The more complicated the securitized asset and the less uniform its characteristics, the more difficult it is to achieve the balance required to satisfy investor concerns. Nonetheless, the number and size of asset-backed issuances in the past two years in particular, appear to signal another significant move in the on-going process of disinter-
Publication Year: 1998
Publication Date: 1998-01-01
Language: en
Type: article
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Cited By Count: 3
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