Securities issuance

For example, in a network environment it may be necessary for security reasons to limit the issuance of critical commands to a particular authorized workstation. 

Investment Company Act, Release No. 19105, [1992 Transfer Binder] Fed. Sec. L. Rep. (CCH) 1 85,062, at 83,500 (Nov. 19, 1992) (provided in connection with the issuance of Rule 3a-7 under the Investment Company Act of 1940). The terms "securitization," "asset secu-ritiMtion," and "structured finance" are used interchangeably. Each refers to a company s use of cash flows from its assets to raise funding. The term "securitization" specifically refers to the issuance Oi securities backed by such cash flows. 

An originator with 100 million of imsecured debt, bearing an interest rate of X percent, plans to repay 50 million of this unsecured debt with the proceeds of a new 50 million issuance of secured debt. The principle of exposure conservation states that the interest rate on the secured debt will be reduced to X-Y percent, but this reduction in rate will be matched by an interest rate increase on the remaining unsecured debt to X+Y percent. This analysis assumes that the unsecured creditors are free to adjust to a market rate. Therefore, according to the theory, the originator makes no net gain from granting security. 

If this originator repaid the 50 million of the unsecured debt from the proceeds of a securitization, instead of from the issuance of secured debt, the interest rate on the remaining unsecured debt would again rise to X+Y percent. However,... 

To illustrate, we will value the same hypothetical 4-year floater assuming that the required margin is now 20 basis points. For this to occur, some dimension of the floater s risk or the market must have increased since the floater s issuance. Now in order to be reset to par, our floater would hypothetically have to possess a coupon rate equal to 3-month LIBOR plus 20 basis points. Since the quoted margin is fixed, the floater s price must fall to reflect the market s perceived increase in the security s risk. 

There are two basic forms of pooled commercial mortgage transactions the true sale and the synthetic structures. The true sale mechanism, as its name suggests, involves the sale of assets from the originator s balance sheet to an SPV, which are then used as security for the issue of notes to investors. Synthetic structures, by contrast, involve the creation of a credit derivative linked to the performance of a pool of loans. The loans themselves remain on the balance sheet of the originator but the credit risks associated with these loans are transferred through the credit derivative to investors. Synthetic structures can simplify the issuance process and avoid many of the complexities (and costs) associated with the sale of assets in many jurisdictions. 

There are events which cause an industry-wide build up of supply—typical examples have been the UMTS financing deals from telecom operators which started in the middle of last year, and the spate of CP refinancing transactions hitting the market this year from auto companies. Issuance of fresh securities can influence spread performance in three ways. 

The drafting of the Priority of Payments is probably the clause that will take the most time for the documentation of the Exchangeable Notes. In addition to the Priority of Payments clause determining what would occur if the Final Notes are not issued and the collateral needs to be realised, two additional waterfalls will be necessary, one to determine what to do with the interest paid in the Collateral Debt Securities during the Warehouse Stage on the Final Closing Date, the second to determine what to do with the proceeds from the issuance of the Final Notes (see below). 

It is worthwhile to note that in addition to delineating the specific powers and duties of a trustee within a given trust structure, the issuance documentation is sometimes drafted to draw a distinction between the roles of note trustee and security trustee. ... 

Under normal circumstances, the role of the trustee in a Eurobond issuance governed by English law, whether the role is cast as a note trustee, security trustee or both, is largely passive. In most Eurobond transactions, even highly structured transactions, the issuer is left to conduct its... 

The use of trusts and professional trustees within Eurobond issuance serves a number of legal and practical purposes. In the main, however, the essential service the trustee brings to the transaction is stability to the transaction and piece of mind for bondholders and issuers alike. Accordingly, the trustee is an invaluable element of a successful secured Eurobond transaction. Further to the role of trustee the Trust bank will offer a range of services to support the structured finance market place. 

Conversion Agent—Coordinates the surrender of securities by bondholders for the issuance of share certificates in lieu in a convertible bond issue. 

CFR 383, Subpart I — Requirement for Transportation Security Administration approval of hazardous materials endorsement issuances. 

There are two types of reserve funds cash reserve funds and excess servicing spread accounts. A cash reserve fund is a separate fund into which a portion of the profits from the bonds issuance have been deposited and invested in short-term hank securities. In a default, the cash in the fund is used to compensate investors who have suffered capital losses. A cash reserve fund is often set up in conjunction with another type of credit enhancement, such as a letter of credit. 

Security begins with the individual, and prudent security practices for laboratories should include a system that limits access to authorized personnel who have a need to work in the laboratory. Authorized personnel should be approved to work in a particular area and have access and authority to use COCs by someone in the institution. Authorized personnel should be given access through keys or card keys and may have identification badges. The issuance of keys or card keys should be subject to an established process in which laboratory personnel sign for keys and turn them in when they leave the program. Keys should be of a type that is not readily duplicated. 

---