Securitisation 2025

CAYMAN ISLANDS Law and Practice Contributed by: Agnes Molnar, Jason Ta, Paul Walters and Gemma Walters, Travers Thorp Alberga

Grant of Security Immediately upon the transfer or assignment to the SPE of the receivables, a security grant will be made in favour of a security trustee for the benefit of the secured parties. Tax There is no concept of tax residency under the laws of the Cayman Islands, rather, the applica - ble onshore regimes do not claim a tax nexus or base if implemented correctly. There is cur - rently no income, corporation or capital gains tax charged in the Cayman Islands. See 7. Tax Laws and Issues . Foreign Account Tax Compliance Act (FATCA) The Cayman Islands Tax Information Author - ity Act (International Tax Compliance) (United States of America) Regulations (2021 Revision) was implemented in furtherance of the intergov - ernmental agreement between the United States and the Cayman Islands and requires financial institutions to report US tax resident account - holders to the Cayman Islands Tax Information Authority, which will pass such information to the US IRS. As a result, the SPE should generally not be subject to withholding tax on payments made to the SPE. Common Reporting Standard The Cayman Islands has implemented the Organisation for Economic Co-operation and Development (OECD) Standard for Automatic Exchange of Financial Account Information (commonly known as the Common Reporting Standard (CRS)) through the Tax Information Authority (International Tax Compliance) (Com - mon Reporting Standard) Regulations (2021 Revision).

analysis of the corporate benefit to the SPE of it entering into the securitisation. Limited Recourse The transaction documents will provide that the secured parties must rely solely on the cash flows generated by the receivables (and in cer - tain circumstances following an event of default, proceeds from the liquidation of the underlying assets) in order for the SPE to meet its payment obligations to the secured parties. If distributions on the assets are insufficient to make payments to the secured parties, no other assets will be available for the shortfall and, following liquida - tion of the assets, the liability of the SPE to pay any such shortfall will be extinguished. Issuance of Debt Securities and Waterfalls The transaction parties will agree the order and frequency of distributions paid by the SPE, both in normal course and in an enforcement situation (such priorities of payment, the “waterfalls”). The laws of the Cayman Islands recognise both contractual and structural subordination and the Companies Act (defined below) specifically pro - vides that an otherwise enforceable agreement to contractually subordinate claims shall be recognised in a liquidation of a Cayman Islands company. There will typically be no intention to accumu - late any surplus in the SPE (other than amounts standing to the credit of a general reserve or liquidity fund). Receivables On the closing date of the securitisation, title to the receivables and their related security are transferred to the SPE. The initial purchase price is funded using the net proceeds of the issuance of the debt securities of the SPE.

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