Securitization

2002 and 2003 has seen many Asian nations embrace securitisation. Whilst Korea, Japan and Australia have been leaders in this market for some time, Taiwan, the Philippines, Thailand, Hong Kong and many others including Middle East countries are starting to recognise the benefits that securitisation can bring. The number of deals completed in this market is rapidly increasing, however, it is still well short of the size of the market in the USA and Europe.

Traditional Asset classes for securitisation include auto loans and equipment leases, credit cards and trade receivables.

NewHaven Capital Limited has created a series of asset-backed bonds providing a security of principal to subscribers with a relatively new asset - Senior Life Settlement. Unlike most corporate bonds these ABS bonds are secured by collateral serviced by cashflows produced from the collateral and credit enhanced with tight legal structural features such as a bankrupt remote issuer and perfected security interest on the collateral on behalf of the investors.

The assets purchased, essentially life insurance policies rated 'A' and above of US Life Companies, are an extremely attractive credit risk and are receiving considerable attention in the world capital markets.