NEW ZEALAND Law and Practice Contributed by: Deemple Budhia, Ling Yan Pang, Fred Ward and Matt Kersey, Russell McVeagh
er supervisor. To the extent that decisions are required of investors during the course of a term securitisation, the programme documents pro - vide a process for investors to make such deci -
The most common remedies for breach of such warranties are repurchase by the originator and/ or an indemnity or other compensatory payment from the originator. The warranties given by the trustee of an SPE are focused on (among other things) the validity of the trust, its status as the sole trustee of the trust and its solvency. 3.3 Principal Perfection Provisions Perfection is required to occur when certain per - fection triggers exist. For example: • insolvency of the originator; • a termination of the appointment of the originator as servicer where an appropriate substitute has not been appointed; or • where required by law or a relevant court. Following such a perfection trigger, the SPE must notify the relevant obligors of the transfer, ensure the related security is transferred into its own name and potentially require the receiva - bles files to be delivered to it. To the extent the originator’s assistance is required to perfect the SPE’s title to the receiv - ables and related security, the originator cov - enants to provide such assistance. In addition, it will grant a power of attorney in favour of the SPE to enable it to undertake any perfection action the originator is required to do. 3.4 Principal Covenants As with warranties, the covenants given in a securitisation depend on the party’s role in the structure. Usual covenants given by the originator include covenants about how the sale process for future receivables will be undertaken, its repurchase
sions, usually through a meeting. 2.8 Security Trustees/Agents
In New Zealand, securitisations will have a secu - rity trustee (rather than a security agent) that is generally an independent trustee company. The security trustee holds the security on trust for secured creditors of the securitisation (the inves - tors and other parties to the securitisation). 3. Documentation 3.1 Bankruptcy-Remote Transfer of Financial Assets Please see the descriptions in 1.2 Structures Relating to Financial Assets , 6.1 Insolvency Laws , 6.2 SPEs and 6.3 Transfer of Financial Assets regarding the use of trusts, trustee com - panies, trust managers and true sale. 3.2 Principal Warranties Warranties vary, depending on the role of the party that is giving the relevant warranties. Most importantly from a sale perspective, an originator will warrant: • the existence and validity of receivables and related security; • that it complied with all material laws in rela - tion to the origination process; • as to key characteristics of the receivables and related security; and • that the receivables and related security meet defined eligibility criteria.
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