Development Financing during a Crisis : Securitization of Future Receivables

Ketkar, Suhas ; Ratha, Dilip

World Bank, Washington, DC

关键词: ACCOUNTING;    ASSET BACKED SECURITIES;    ASSET SECURITIZATION;    ASSETS;    BALANCE SHEET;   

DOI  :  10.1596/1813-9450-2582
RP-ID  :  WPS2582

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Mexico's Telmex undertook the firstfuture-flow securitization transaction in 1987. From thenthrough 1999, the principal credit rating agencies ratedmore than 200 transactions totaling $47.3 billion. Studyingseveral sources, the authors draw conclusions about therationale for using this asset class, the size of itsunrealized potential, and the main constraints on itsgrowth.Typically the borrowing entity (the originator)sells its future product (receivable) directly or indirectlyto an offshore special purpose vehicle (SPV), which issuesthe debt instrument. Designated international customers maketheir payments for the exports directly to an offshorecollection account managed by a trustee. The collectionagent makes principal and interest payments to investors andpays the rest to the originator. This transaction structureallows many investment-grade borrowers in developingcountries to pierce the sovereign credit ceiling and getlonger-term financing at significantly lower interest costs.The investment-grade rating attracts a wider group ofinvestors. And establishing a credit history for theborrower makes it easier for it to access capital marketslater, at lower costs.This asset class is attractive forinvestors-especially buy-and-hold investors, such asinsurance companies-because of its good credit rating andstellar performance in good and bad times. Defaults in thisasset class are rare, despite frequent liquidity crises indeveloping countries.Latin American issuers (Argentina,Brazil, Mexico, and Venezuela) dominate this market. Nearlyhalf the dollar amounts raised are backed by receivables onoil and gas. Recent transactions have involved receivableson credit cards, telephones, workers' remittances,taxes, and exports.The potential for securing futurereceivables is several times the current level ($10 billionannually). The greatest potential lies outside LatinAmerica, in Eastern Europe and Central Asia (fuel andmineral exports), the Middle East (oil), and South Asia(remittances, credit card vouchers, and telephonereceivables).One constraint on growth is the paucity ofgood collateral in developing countries. Crude oil may bebetter collateral than refined petroleum. Agriculturalcommodities are harder to securitize.Another constraint:the dearth of high-quality issuers in developing countries.Securitization deals are complex, with high preparationcosts and long lead times. The ideal candidates areinvestment-grade entities (in terms of local currency) insub-investment-grade countries (in terms of foreigncurrency).Establishing indigenous rating agencies canslash out-of-pocket costs. Developing standardized templatesfor certain types of securitizations might help. A mastertrust arrangement can reduce constraints on size.Multilateral institutions might consider providing seedmoney and technical assistance for contingent private credit facilities.