Within the BRICs nations, China has lead the way with securitization in Asia with several impressive publicly offered securitized securities. In April 2013, internet mogul Alibaba Group priced US$82 million of asset-backed securities using special asset management plans or SAMPS. Remarkably on of the internet giants first public securitizations that the China Securities Regulatory Commission approved. In the event of Alibaba’s structure, they essentially backed the securitization with short-term loans and notes or micro-loans through their ecommerce platform to SMEs, making them the first China securitization firm for SME loans.

In order to understand the powerful nature of securitization of micro-loans, Alibaba lent to 300,000 SMEs, and with new funding it plans on serving another 500,000 small businesses. With less than 1% non-performing loans, the securitization model proven by Alibaba is a milestone and glowing example of Securitization Companies for SME’s within the BRICS economic community of Brazil, Russia, India, China, and South Africa. Especially within South Africa, where the SA Securitization Forum www.sasf.co.za is growing in acceptance and numbers of financial institutions.

As SME’s face a growing problem of accessing capital within Africa, this new method of securitization loans of small business loans gives new comers the opportunity to cater to the market, of which there are generally few defaults. Structured credit bureaus are essential, such as those available in South Africa. In order to build a securitization company for funding SMEs, one can contact info@securitizationfund.com.

In addition, companies can utilize a securitization vehicle, or SPV directly as a form of bundling their assets, cashflow, and IP to form an offering. In some cases, people can utilize a safe keeping receipt (www.safekeepingreceipts.com) to secure the assets in deposit with a financial institution, of which then the assets are pledged to a bond, a securitization bond. The SKR acts as the assets securitization of which is then pledged to a trust of bond structure or SPV, essentially forming the offering. The securitization process involves building of the trust or SPV, a management component, pledging of assets for asset backing of the instrument, and possibly the securitization of the businesses shares. Utilizing the safe keeping receipt (SKR) is a form of Bank Securitization, as is holding the assets pledged as security on behalf of the firm. Another example of Bank Securitzation within the Energy sector was Deutsche Bank who closed the first-ever securitization of loans for residential energy efficiency with a $104 million PACE bond in California. The bond helps fund upgrading home insulation and installation of solar panels.

The 11 year, double-AA rated bond was priced at a fixed coupon of 4.75% and was extraordinarily well received by investors which included large US insurance companies and asset managers. Deutsche Bank acted as sole structuring agent and sole book runner. The deal is listed on Bloomberg, under ticker ‘HERO 2014-1A A Mtge’.

 

During 2013 SolarCity executed on a solar financing milestone and offered a private placement of $54.4 million of an “aggregate principal amount of Solar Asset Backed Notes, Series 2013-1.” The yield on SolarCity’s BBB+ rated 2013-1 notes was 4.80 percent.

That was one of the first times securitization was employed for distributed solar generation.

“Securitization is the practice of pooling disparate sources of debt and selling it as a package to investors on the secondary market,” as stated by GTM’s Stephen Lacey. Securitization improves liquidity and can spur demand (and could be applied to energy efficiency as well). It has the potential to lower the cost of solar financing while enlarging the finance pool.

The potential of solar secutization in Africa is enormous. Firms such as www.solarcontinent.com are already moving forward looking for Solar Projects in Africa to assist with Africa Securitization of solar projects and clean energy projects.

The ideal securitization firm partner is our firm, you can contact us at info@securitizationfund.com for more information.

We specialize in Asset Back Securitization products within emerging markets.

Our firm is also involved with building Mauritius based SPV companies, Luxembourg, and other Securitization Funds. Mauritius is one of the ideal locations to set-up a fund, within the current regulations, a securitization fund can be formed within Mauritius for any global market with tax benefits to the companies securitizing their assets offshore through the fund.

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