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Case 11 - Securitisation

Published online by Cambridge University Press:  22 August 2009

By
Georg Graf ,
Monika Hinteregger ,
Manuela Weissenbacher ,
Benoit Allemeersch ,
Alain Verbeke ,
Merete Clausen ,
Lionel Smith ,
Jarmo Tuomisto ,
François Barrière  and
Stefan Grundmann
...Show all authors
Edited by
Michele Graziadei ,
Ugo Mattei  and
Lionel Smith
Georg Graf
Affiliation:
Professor of Private Law, University of Salzburg, Austria
Monika Hinteregger
Affiliation:
Professor of Civil Law, University of Graz, Austria
Manuela Weissenbacher
Affiliation:
Assistant to the Chair of Civil Law, University of Graz, Austria
Benoit Allemeersch
Affiliation:
Doctoral researcher Catholic, University of Leuven, Belgium; Attorney-at-Law bar of Brussels, Belgium
Alain Verbeke
Affiliation:
Professor of Private and Comparative Law, Catholic University of Leuven, Belgium
Merete Clausen
Affiliation:
Attorney-at-Law, Denmark
Lionel Smith
Affiliation:
Professor of Law, McGill University Canada
Jarmo Tuomisto
Affiliation:
Professor of Civil Law, University of Turku, Finland
François Barrière
Affiliation:
Junior Professor, University of Paris II, France
Stefan Grundmann
Affiliation:
Professor of Private Law European and International Private and Business Law, Humboldt University, Berlin, Germany
George K. Lekkas
Affiliation:
Attorney-at-Law, Athens, Greece
Niamh Moloney
Affiliation:
Professor of Capital Markets Law, University of Nottingham, England
Eoin O'Dell
Affiliation:
Fellow, Trinity College, Dublin, Ireland
Antonio Gambaro
Affiliation:
Professor of Comparative Private Law, State University of Milan, Italy
Michele Graziadei
Affiliation:
Professor of Comparative Private Law, University of Eastern Piedmont, Italy
Steve Jacoby
Affiliation:
Partner Kremer Associés & Clifford Chance; Lecturer, University of Luxembourg
Marielle Koppenol-Laforce
Affiliation:
Attorney-at-Law Houthoff Buruma, NV, Amsterdam the Netherlands
Pedro Pais de Vasconcelos
Affiliation:
Professor, University of Lisbon, Portugal
George L. Gretton
Affiliation:
Lord President Reid Professor of Law, University of Edinburgh, Scotland
Sergio Cámara Lapuente
Affiliation:
Professor of Civil Law, University of La Rioja, Spain
Cristina González Beilfuss
Affiliation:
Professor of Private International Law, University of Barcelona, Spain
Torgny Håstad
Affiliation:
Justice of the Swedish Supreme Court and formerly Professor of Private Law, Uppsala University, Sweden
Michele Graziadei
Affiliation:
Università degli Studi del Piemonte Orientale Amedeo Avogadro
Ugo Mattei
Affiliation:
Università degli Studi di Torino, Italy
Lionel Smith
Affiliation:
McGill University, Montréal
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Summary

Case

A company, ABC Ltd, lends money on the security of mortgages/hypothecs on immovables. It now wishes to raise money in the financial markets. It wants to use its portfolio of secured loans as security for the transaction. The goals will be that ABC Ltd will not itself become liable on the transaction, and moreover that investors will not be adversely affected by any subsequent insolvency of ABC Ltd. How can the transaction be structured so as to isolate the portfolio of secured loans from the general business of ABC Ltd?

Discussion

AUSTRIA

There are only a few articles on securitisation in the Austrian literature, and no court decision at all. The following remarks therefore have only a preliminary character.

In principle, Austrian law provides all the legal instruments required to structure securitisation transactions. First, it will be necessary to set up a new company, a special purpose vehicle (SPV). In a second step, ABC Ltd shall transfer its secured loans to the SPV. In exchange for them, the SPV shall pay a certain sum to ABC Ltd. To raise the money necessary for this payment, the SPV shall issue bonds to investors. If those investors are the only creditors of the SPV, then the security of the claims assigned to the SPV will also secure the investors' claims. As there is no direct relationship between the investors and ABC Ltd, this company will not be liable for the SPV's debts towards the bondholders.

Type
Chapter
Information
Commercial Trusts in European Private Law , pp. 505 - 532
Publisher: Cambridge University Press
Print publication year: 2005

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