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
Roos to head equity sales and prime finance at Citi, and other moves
Many investors favour one approach over the other, belying their similar aims
Growth of renminbi assets ends Taiwan insurers' love affair with structured credit
State watchdogs issue warnings as insurers turn to proprietary index products
Sign up for Risk.net email alerts
Sponsored video: MarketAxess
Sponsored video: Tradeweb
Multifonds talks to Custody Risk on being nominated for the Post-Trade Technology Vendor of the Year at the Custody Risk Awards 2014
Sponsored webinar: IBM Risk Analytics
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.