Team Building for Securitization

2001 was one of my remarkable years, Trinities Securities Group was found and I joined the Trinity Advisory 2001 Co., Ltd., an advisory company of the group. Since the group was small as well as the market share and placement power were not well-built, thus its policy was to create the difference and initiate new product to approach new clients. I was not sure who brought in the idea of Securitization. I was told to join the team, led by P.Ou and Oliver Hughes from Devonshire Capital, our partner for this project.

Firstly, the team was educated by P.Ou and Oliver who experienced launching securitization products. We consulted with SEC officers several possible cases as well as visited many potential clients. We also teamed up with legal advisor and accounting & tax advisor in order to structure the deal.

Securitization is a financing process to separate assets from originator through legally transfer (true sale) to Special Purpose Vehicle (SPV). SPV issues marketable debt securities and sells to investors, the risk and return of securities rely on cash flow generated by pool of assets that sold to SPV, not the performance of originator, some credit enhancements also employ in order to achieve desired credit rating.

It is also called structured finance. It can be structured differently, depending on types and quality of assets, credit enhancement used, target investors, desired credit rating, and etc. The first deal was not only hard to understand, but involved many parties; we had to educate and convince them to agree with our ideas and to charge on the same basis. It took about 2 years to accomplish our first issue, Osprey Series I - ABCP (Asset Backed Commercial Paper) backed by NHA Residential Hire Purchase in 2002.

Currently, there are various securitization products in the market; you may consider as your investment alternatives.