During a liquidity crisis, developing countries need innovative ways to raise external finance.This research focuses on one such mechanism---asset-backed securitization of future-flow receivables---which provides a means of securing agency credit ratings for new issues that escape the sovereign ceiling and thereby reduce the cost of funding.
Since the first future flow securitization transaction was undertaken by Mexico’s Telmex in 1987, the principal credit rating agencies have rated over 200 transactions with the aggregate principal amount totaling $47.3 billion until the end of 1999. Through an extensive cataloging of rated future flow receivable backed transactions and detailed discussions with rating agency professionals, Wall Street investment bankers, legal experts, and analysts in insurance companies, this study derives a number of conclusions about the rationale for using this asset class, its potential size as compared to its current size, and the prevalent 论文范文http://www.chuibin.com/ constraints on its growth.
A typical future flow structure involves the borrowing entity selling its future product (receivable) directly or indirectly to an offshore Special Purpose Vehicle (SPV).The SPV issues the debt instrument. Designated international customers are directed to pay for the exports from the originating entity directly to an offshore collection account managed by a trustee.The collection agent makes principal and interest payments to the investors and directs excess collections to the originator.
The innovative structuring of these transactions has allowed many investment rade borrowers in developing countries to pierce the sovereign credit ceiling and obtain inancing at significantly lower interest costs and for longer duration. Besides, future low securitizations also attract a much wider class of investors because of their nvestment grade rating.Moreover, by establishing a credit history for the borrower,hese deals enhance the ability and reduce the costs of accessing capital markets in future.本文来自优.文,论-文·网原文请找腾讯324.9114
From the investors’ point of view, the attractiveness of this asset class lies in it good credit rating and its stellar performance in good and bad times. Defaults areextremely rare in this asset class despite frequent and repeated liquidity crises in developing countries. Buy-and-hold investors (such as insurance companies) areattracted to this asset class.
Over three-quarters of rated asset-backed transactions during 1987-99 have involved future flow receivables. This mode of financing has increased since the Mexican peso crisis in 1994-95. Latin American issuers have dominated this market:Mexico alone accounts for over one-half of asset-backed transactions; Argentina, Brazil and Venezuela account for another 34 percent.
Keywords: accounts receivable, Securitization, value based management
I. Introduction
I.1 Developing countries are subject to frequent financial crises and volatility of external capital flows.During a liquidity crisis, developing country entities need to find innovative ways of securing foreign finance. This paper focuses on one such mechanism---asset-backed securitization of future-flow receivables. This method provides developing country entities a means of securing credit ratings that escape the sovereign ceiling, thereby improving access to long-term financing at low cost.2491
[1] [2] [3] [4] [5] [6] [7] [8] 下一页