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SELECTED ASSET SECURITIZATION PROGRAMS

Asset securitization has become one of the most important financing methods used worldwide, enabling companies to tap international securities markets and raise funds at lower cost than traditional financing methods.

SRS structures and then arranges credit enhancement of lesser rated transactions, clients and assets utilizing ratable third party guarantors and structural innovation. Credit enhancement enables cost efficient capital market access to those unable because of market perceptions of credit or asset characteristics. Among its diverse insurance and capital market products and services, SRS provides or has provided the following unique asset securitization programs:

 

 

U.S. Apartment Mortgages –- Single Properties and Portfolios

Special Risk Services provides tax-exempt and taxable bond structures to finance multi-resident real estate properties (apartments, assisted living facilities and senior housing) in the United States either in single properties or portfolios. The SRS developed bond structure employs credit, as well as structural enhancement, thereby earning a higher rating.

Through the mechanism and structure of credit enhancement, borrowers can participate in the issuance of ratable bonded debt. A developer and manager, SRS assumes the role of facility manager, in addition to its capacity as the insurer representative. As facility manager, SRS oversees all insurance and structural enhancement issues with all appropriate parties (insurer, borrower, banker, rating agency).

World Wide Equipment and Real Estate Residual Value Insurance

For various financial structuring reasons, sponsors of equipment and real estate financing leases often prefer to use a residual value insurance policy to support the balloon note at the end of the transaction term. Insurers take the long view of future asset values and are willing to accept the risks associated with such.

SRS is experienced in structuring and arranging residual value insurance for such transactions. Through use of international insurance companies, SRS structures and arranges residual value insurance to meet the needs of most structured lease transactions.

U.S. Residential MBS Special Hazard Insurance

Special hazard insurance is a specific contingency coverage required by the rating agencies on insured mortgage pools in the US. It covers that portion of traditional pool insurance not covered by standard hazard insurance (standard fire and extended coverage). Unlike standard hazard or flood insurance, which are taken out by the borrowers to protect their homes, special hazard insurance is taken out by the issuer of a mortgage backed security (MBS) for the benefit of the investors in the MBS. Most standard hazard policies do not cover losses resulting from floods and other water-related causes and earth movement (including earthquakes, landslides and mud flows). These are the kinds of exposures covered by special hazard. Special hazard insurance fills the potential void for losses not covered by a traditional pool policy or a standard hazard policy and earns a high rating from the rating agencies.

Japanese Consumer Loan Securitization

Japan's consumer finance industry developed in the early 1960s in response to a gap in traditional lending services of conventional financial institutions to meet the need for small, unsecured and quickly arranged loans to ordinary consumers. SRS assists this growing industry by diversifying lending sources, acquiring stable longer-term financings, and lowering cost of funding. SRS developed the structure for insured receivable securitization of Japan originated receivable assets in the international capital markets. SRS was the co-arranger of a US$l billion three-traunche securitization of Japanese consumer loan receivables in 1994, 1995 and 1996 and the lead arranger of a US$200 million securitization of Japanese consumer loan receivables in December 1998.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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