Synthetic Securitisations / SRT Transactions

Ireland is a leading jurisdiction for the establishment of special purpose vehicles (SPVs) for synthetic securitisations and significant risk transfer transactions. The unrivalled strength of the firm’s Capital Markets, Tax, Financial Regulation and Listing capabilities makes Arthur Cox LLP a market leader in this area.

The specific availability in Ireland of published tax guidance on the treatment of synthetic securitisations from an Interest Limitation Rules perspective has been particularly attractive to certain originators who have welcomed the certainty of analysis on this area when compared to other potential SPV jurisdictions. This feature of the Irish market, together with its developed corporate legal system, the fact that it is an ‘on-shore’ jurisdiction, the professional and administration services that are available locally and its favourable tax regime are the predominant reasons for Ireland’s popularity as an SPV location for synthetic securitisations and significant risk transfer transactions.

Irish SPVs also provide a high degree of flexibility for synthetic securitisations and significant risk transfer transactions, as they can be utilised to suit the exact needs and requirements of the parties involved depending on the specific nature of the relevant transaction (e.g. tranching requirements, first loss requirements and amortisation requirements). Arthur Cox LLP has worked with a variety of originators through market developments in this area and Irish SPVs have been used as part of the first iteration of transactions in this area (involving credit default swaps) before being continued to be used in more recent transaction structures involving credit protection deeds and financial guarantees. Arthur Cox LLP has worked on synthetic securitisations and significant risk transfer transactions that have referenced a host of different underlying assets and have additionally worked on synthetic securitisations that have achieved the simple, transparent and standardised (STS) designation.

Through Arthur Cox Listing Services Limited, we also advise on the listing of the notes relating to synthetic securitisations and significant risk transfer transactions and can facilitate the listing of such notes on exchanges such as the Global Exchange Market (GEM) on Euronext Dublin, Ireland, The International Stock Exchange (TISE) in Guernsey, the Euro MTF on the Luxembourg Stock Exchange and the Vienna Multi Trading Facility on the Wiener Boerse, Vienna.