HSBC has launched the largest ever structured investment vehicle (SIV) launch, with an initial portfolio of over $6 billion, called Asscher Finance.The SIV will invest in 90% AAA-rated asset-backed securities (ABS), while the minimum rating for any investment is A-/A3. The SIV has a three-tier capital structure. The top tier consists of commercial paper (CP), the second tier is European and US denominated medium-term notes (MTNs), the third tier includes both A-rated mezzanine notes and BBB-rated income notes. The latter tranche, made up of both the mezzanine and income notes, will issue $550 million of notes. HSBC also has a $23 billion CP programme, Solitaire Funding, that invests in ABS.
The bank’s first SIV, Cullinan Finance, launched in September 2005 and now has $35 billion under management. Cullinan can invest securities rated BBB-/Baa3 or above.
More on Structured Products
ECB rate cut to drive modest recovery in eurozone
Correlation sensitivity in multi-asset structured products explained
UK investors offered autocallable in conservative or bullish versions
Schlumberger product puts capital at risk if American barrier is breached
Sign up for Risk.net email alerts
Nominated for two technology awards
Nominated for post trade technology award
Sponsored webinar: Collateral and counterparty tracking
Isda directors warn on fragmentation, access and liquidity - but expect problems to pass
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.