Securitisation 2025

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

2. Roles and Responsibilities of the Parties 2.1 Issuers See 1.1 Common Financial Assets and 6.2 SPEs . 2.2 Sponsors Role of the Sponsor The role and meaning of the term “sponsor” varies across jurisdictions. There is no statu - tory definition of such term under the laws of the Cayman Islands with respect to a securitisa - tion. The sponsor would usually be understood to be the party who initiates the securitisation In many cases, the SPE and sponsor may enter into an agreement pursuant to which the transferor or sponsor will reimburse the SPE in respect of certain obligations of the SPE to make payment of certain transaction fees, expenses and payments under any indemnities provided by the SPE (a “reimbursement agreement”). 2.3 Originators/Sellers and appoints service providers. Reimbursement Agreements There is no statutory definition of “originator” or “seller” under the laws of the Cayman Islands with respect to a securitisation SPE. • Originator: The “originator” would usually be understood to be the party who initially cre - ated legal and equitable title in the underlying assets. • Seller: The “seller”, in the context of a secu - ritisation, is the transferor (transferring current or future rights over, or in respect of, the receivables) from whom an SPE acquires (or would in the future have the right or an obli - gation to acquire) title to the receivables.

1.5 Material Forms of Credit Enhancement

SPEs are able, under the laws of the Cayman Islands, to enter into securitisations, which include typical forms of credit enhancement, the most common forms being: • Tranching of Credit Risk: Tranching involves contractual subordination of the rights of each secured party to receive payment. The highest-ranking class of debt securities will rank pari passu and rateably without any preference or priority among themselves as to payments of interest and principal. Each other class of debt securities will be subordinated in payment to each higher-ranking class. Pursuant to the waterfalls, no payments will be made on any class of debt securities until amounts due on each higher-ranking class have been paid in full. • Over-Collateralisation: The assets of the SPE may be required to exceed the aggregate amount outstanding under its debt securities by a specified percentage. • Excess Spread: Additional revenue may be generated by the difference between the interest payable on the underlying assets (such as a mortgage interest rate) and the interest payable on the debt securities. • Reserve Funds: A general reserve fund is typically established by the SPE from the proceeds of the issuance of the debt securi - ties (up to a required amount). Typically, such amounts may be invested by or on behalf of the SPE in authorised investments. A liquid - ity reserve fund may also be established by the SPE on the closing date (up to a required amount) in order to provide the SPE with increased liquidity.

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