NEW ZEALAND Law and Practice Contributed by: Deemple Budhia, Ling Yan Pang, Fred Ward and Matt Kersey, Russell McVeagh
3.9 Derivatives The most common derivatives used in secu - ritisations are to manage risks arising from the cashflows of the securitised assets, most typi - cally interest rate swaps. These swaps are used to swap the interest rate of the receivables (typi - cally a fixed rate) for the floating interest rate payable on the notes. Where the currency of the receivables differs from the currency of the notes, currency swaps would also be used. 3.10 Offering Memoranda As discussed further in 4.2 General Disclosure Laws and Regulations , securitisations in New Zealand are generally not public offers and so offering memoranda or other offering documen - tation are not required. However, these are often provided to potential investors in a term securiti - sation. They typically contain a summary of the securitisation documentation, information about the SPE and originator and identify key risks that may impact the likelihood of the notes issued by the SPE being repaid.
assets becomes enforceable. A post-enforce - ment waterfall is used following such defaults. Warehouse securitisations typically have a multi- step process prior to a default being triggered, comprising: • stop-funding events, when the warehouse facility ceases to be available; • amortisation events, when the warehouse facility must be amortised; and • events of default, when the warehouse facil - ity is accelerated and the security becomes enforceable. 3.7 Principal Indemnities A number of indemnities can be given in a secu - ritisation. By way of example, it is common for the originator to undertake to repurchase “ineli - gible” receivables from an SPE or provide an indemnity where it fails to do so. In addition, the trustee of an SPE will also give indemnities under the programme documents – although in such a case the indemnity is limited to its recourse to the trust assets. It is also common for the trust manager and trustee to indemnify lead manag - The terms and conditions relating to the notes are typically contained in a note deed poll or securitisation-specific document, such as a series notice or series supplement. The terms and conditions relating to the notes include: • form and status of the notes; • provisions for payment of interest and princi - pal; and • events of default and consequences of these (see 3.6 Principal Defaults ). ers/dealers to any note issuance. 3.8 Bonds/Notes/Securities
4. Laws and Regulations Specifically Relating to Securitisation 4.1 Specific Disclosure Laws or Regulations
There are currently no securitisation-specific disclosure laws or regulations in New Zealand. 4.2 General Disclosure Laws or Regulations The primary legislation that regulates the New Zealand capital markets is the Financial Mar - kets Conduct Act 2013 (FMC Act). The FMC Act applies to any offer of financial products in New
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