More NewsSecuritizations That Dodge Bankruptcy ‘Bullet’ Rest On Qualitative Strengths

Securitizations That Dodge Bankruptcy 'Bullet' Rest On Qualitative Strengths

A survey of the impact of seller-servicer bankruptcies on their securitizations by Moody’s reveals that investors in these deals ultimately benefit as much from qualitative factors such as diversity of the seller-servicer’s funding sources as from legal and structural safeguards. Furthermore, market history now appears to indicate that as assets become less commoditized or the deal structure and servicing more complex, there is a greater chance that securitization won’t completely succeed in insulating investors from losses. The securitization market’s lengthening history includes both bankruptcy- or receivership-related blowups such as Heilig-Meyers, LTV Steel, NextCard, and Contimortgage, as well as securitizations that were taken out in an orderly process. The differences between the level of investor protection in those deals can ultimately be traced to qualitative factors relating to the transactions and their sponsors and to the practical realities of the financial community, in Moody’s opinion.

Related Articles

Infosys Finacle to power Santander UK’s international cash management system

More News Infosys Finacle to power Santander UK’s international cash management system

3w The Global Treasurer
Preparing for GDPR? Here’s four things to consider

More News Preparing for GDPR? Here’s four things to consider

4m Elliott Wiseman
Cash flow in focus for investors

Cash Management Cash flow in focus for investors

5m Conor Deegan
Treasury TV: Karen Pugsley, Domino's Pizza Group

More News Treasury TV: Karen Pugsley, Domino's Pizza Group

5m Victoria Beckett
Treasury TV: Yeng Butler compares US and European MMF reforms

Compliance Treasury TV: Yeng Butler compares US and European MMF reforms

5m Victoria Beckett
Treasury TV: Tim de Knegt, The Port of Rotterdam

10 Minutes With The Treasury Treasury TV: Tim de Knegt, The Port of Rotterdam

5m Victoria Beckett
Banks are selling clients short with short dated cash deposit U-turns

Banking Banks are selling clients short with short dated cash deposit U-turns

5m Victoria Beckett
What does sterling’s Brexit boost mean for UK manufacturers?

More News What does sterling’s Brexit boost mean for UK manufacturers?

6m Tasja Botha