MARKET STATEMENT
by
The Cayman Islands is one the
worldÍs leading offshore financial centres and has become the first
choice location for all types of structured finance transactions
offering the key legal elements such as a creditor-friendly legal
system, recognition of foreign law governed security interests and
no income, profits, capital gains or withholding tax, that arrangers,
issuers and investors require. The Cayman Islands bankruptcy
remote vehicle is now well-established and many transactions are
AAA rated by the rating agencies. S&P has recently published
specific Cayman Islands legal criteria for special purpose entities.
In the high volume repackaging
market, the number of repackaging issues through repackaging MTN
programmes continues to grow, particularly issues of credit linked
notes. In addition, the Cayman Islands is the jurisdiction
of choice for CDO transactions, accounting for over 500 CDO issuers,
many issuing equity in addition to debt, with an increase in the
synthetic CDO market. The securitization market has also continued
to develop more complex structures with not only an increased diversity
of assets being securitised but with Cayman Islands vehicles being
used in an increasing variety of roles in addition to issuer, such
as intermediary, servicer or originator, the latter being particularly
useful where using a Cayman Islands SPV as originator is able to
overcome the local law requirements which may make the sale of receivables
or true sale analysis difficult.
The market for securities issued
by Cayman Islands vehicles has been strengthened by the Cayman Islands
being one of the first offshore jurisdictions to be cleared by both
the OECD and FATF.
Article provided by: Rebecca
Steller
Partner, Maples and Calder
rebecca.steller@maplesandcalder.com
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