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A selection of articles across all Capital Markets Intelligence publications

Credit enhancement optimisation model in securitisation transactions

By Vishal Saxena and Rajesh C, Northern Arc Capital

Northern Arc Capital (previously known as IFMR Capital) acts as a structurer, arranger and investor of securitisation transactions in different sectors like microfinance, housing finance, vehicle finance, consumer durables and small business loans. It has done over 400 securitisation transactions in the last eight years and helped different originators to raise more than US$3.15bn capital through these transactions. To date, the losses to the investors in the securitisation transactions are well below 0.49%, for senior investors, the losses are below 0.09%.

Growth of ABS opportunities in Asian markets

By Navita Yadav, Vistra Group

Securitisation has played a vital role in the developed markets for an extended period of time. As the range of securitised products and markets have grown in terms of variety and sophistication, a wider range of investors and market participants have recognised the potential for securitisation to meet the objectives of enhanced return and portfolio diversification. Several markets in Asia have established securitisation frameworks with varying degrees of sophistication over the years, but the fact remains that it is an under-utilised market. Asia’s local debt markets undoubtedly have taken on a greater importance with offshore issuance being pre-eminent. Asia’s economies have learnt from the past and have taken measures over the years to make their markets more resilient. Given that the central issue in the Asian market remained that of attracting investors, the focus in that region has been on credit enhancements and risk repackaging.

Debt capital markets in China

By Jack Li (Zhiqiang Li), Jin Mao Partners

The most typical type of debt securities offering in China is within the inter-bank bond market. Attached to the China Foreign Exchange Trading Center and the China Central Depository and Clearing Co Ltd, the inter-bank bond market is a bond purchase and repo market where various financial institutions participate, including merchant banks, rural credit cooperatives, insurance companies and securities companies. The inter-bank bond market composes a large part of China’s bond market and is its principal component. Measured from the number of bonds in custody, both the amount of bond storage and bond trading in the inter-bank bond market encompass more than 90% of China’s bond market.

Bond administration system of Japan: Current law and proposed supplement

By Shunsuke Aoki and Kanji Harada, Anderson Mori & Tomotsune

This article provides an overview of Japan’s current bond administration system and proposed future changes, summarising the current system and the reasons why current practice avoids the appointment of Bond Administrators, and looks at the key points of the proposed supplementary system.

Developments in cross-border insolvency: The UNCITRAL Model Law on Cross-border Insolvency and current issues

By Jenny Clift, UNCITRAL Secretariat, Office of Legal Affairs, United Nations

Recognising that disparities between the national laws governing international trade can potentially create obstacles to cross-border flows of goods and investment, in 1966 the General Assembly established the United Nations Commission on International Trade Law to serve as the vehicle by which the United Nations could play a more active role in reducing or removing those obstacles through modernisation and harmonisation of law.

Meeting the top five challenges facing widebody aircraft transitions

By Alastair Knox, Rolls-Royce Plc

The new and used narrowbody aircraft market continues to be significantly larger than the widebody aircraft market in terms of both the number of operators, and aircraft volume. This limited market coupled with the current availability of next generation widebody aircraft from the main airframers contributes to a challenging second operator market – new aircraft competing with used for a limited number of customers.

EETCs: A viable financing option for US and non-US airlines alike?

By Mary O'Neill, Shari McField and Wanda Ebanks, Maples and Calder

In simple terms, enhanced equipment trust certificates (EETCs) are corporate debt securities, typically issued by airlines. EETCs are secured on the aircraft operated by the airlines, and are structured through special purpose companies (SPVs) created specifically to own the aircraft and “enhanced” by elements such as debt tranching, availability of liquidity facilities and over-collateralisation.

A glimpse into the future of the fintech industry

By Tim O’Sullivan, NETSOL Technologies Europe Ltd

The financial technology (fintech) industry is causing the biggest disruption within the financial services industry since the latter’s inception. The fintech industry saw a huge boom in 2016 as it developed new banking technologies that perpetuated an industry wide change. The industry saw an investment of US$9.4bn to the second quarter of 2016. Funding for the fintech industry has increased globally and the future seems even more promising.

Seizing the next digital opportunity

By Carmen Ene and Nick Gallop, 3 Step IT

Digitisation is widespread, the next step is digitalisation. It offers the opportunity to re-engineer business processes and create competitive advantage. But opportunity is not always realised: skills are in scarce supply and the expectations for a digitalisation project are not always realistic. What should we hope for? Where should we focus? How can we maximise the chances of success?

Europe’s position in global capital markets

By Rainer Riess, Federation of European Securities Exchanges (FESE)

Recent empirical evidence1 shows that European capital markets are not fulfilling their potential and currently lag behind their counterparts in the US and Asia in many regards, for example, the use of equity finance firms, the prevalence of venture capital, and the relative share of IPOs. There is significant room for development and Europe stands to greatly benefit from increasing liquid, transparent and efficient capital markets.

Australia Leasing Review

By Helen Gordon, Australian Finance Industry Association

Lease finance in Australia is a mature finance product, having been offered as part of a portfolio of equipment financing techniques for over 60 years. Leasing is also one of the few tax benefit transfer mechanisms recognised within the Australian taxation system.

Estonia Leasing Review

By Reet Hääl, Estonian Leasing Association, and Joel Zernask, KPMG Baltics OÜ

Estonia, as a member of the EU is greatly influenced by the world economy especially economic trends and political instability in EU as well as in the neighbouring countries. New leasing business carried out in 2016 by members of the Estonian Leasing Association totalled €1,093m, representing a growth of 17.2% compared to 2015.

Taiwan Leasing Review

By Albert F. L. Chen, Chailease Finance Co., Ltd

In 2009, due to the global financial turmoil, Taiwan’s leasing market decreased 8.06% compared to 2008. Nevertheless, the Taipei Leasing Association’s statistics showed that the world economy grew and the business recovered quickly growing by 37.70% in 2010. The leasing business continued to increase from 2011 to 2016.