Avoiding the potholes

Investors have been jumping on the whole business securitisation juggernaut, a vehicle offering security and better yields. But in recent months, the market’s risks have come to the fore, focusing investors’ minds on potential hazards. Laurence Neville reports

You could say that whole-business securitisations cover life from the pub to the grave. After emerging in the 1990s in the form of pub securitisations, the market has expanded to cover deals as diverse as a funeral company called Dignity.

Whole-business securitisations now appear unstoppable, offering investors greater security and higher yields than corporate bonds and providing issuers with cheap financing.

For many corporate bond managers, not owning whole business securitisation