SPAIN Law and Practice Contributed by: Jaime de la Torre and Jaime Juan Rodríguez, Cuatrecasas
be noted that this alternative is expressly omitted when the structure is intended to opt out from the Securitisation Regulation; • hedging instruments – this credit enhance - ment is especially relevant in transactions where the assets and liabilities have different interest profiles; • reserves – Spanish transactions sometimes embed one or two types of reserves: (a) reserves as proper credit enhancements; and/or (b) reserves to mitigate other risks (commin - gling risk, compensation risk, etc); and • excess spread – this is the most usual credit enhancement in Spain and is closely linked to the financial model of the transaction. 2. Roles and Responsibilities of the Parties 2.1 Issuers Under the Spanish Securitisation Law, securiti - sations made in Spain are structured by means of a special type of SPE known as a fondo de titulización , the main characteristics of which are discussed in 6.2 SPEs . The role of the SPE is ring-fenced as it is admin - istered by a management company (see 2.7 Bond/Note Trustees ) with no possibility of other business activities being conducted outside the scope of the transaction. 2.2 Sponsors The concept of a sponsor is alien to the Spanish Securitisation Law; unlike other EU jurisdictions, this role is not part of the securitisation tradi - tion of Spain. Therefore, at the Spanish level, the applicable rules are those established in Article 2 of the Securitisation Regulation, which cov - ers certain credit institutions (located inside or
outside the EU) and investment firms (other than the originator). 2.3 Originators/Sellers The originator and the seller are usually the same party, and their roles are limited to the following. • Sale and purchase agreement (SPA) – the seller executes the SPA with the SPE (in the case of assets other than mortgage loans). If mortgage loans are transferred, the seller will issue and deliver multiple titles in favour of the SPE, representing the ownership of the mortgage loans (provided that the seller is a financial entity). • Asset liability – the seller assume liabilities vis-à-vis the SPE under a set of representa - tions and warranties regarding itself and the assets. Such liability subsists for the length of the securitisation transaction. • Prospectus liability – responsibility is assumed vis-à-vis noteholders for certain sections of the prospectus (or the information memorandum) that are drafted based on the information provided by it. The most common originators in Spain are: • major and medium banks, especially in resi - dential mortgage loans and consumer loans; • specialist car finance companies, which regularly package car loans in traditional or innovative structures; • consumer loan lenders, which usually securi - tise consumer loans and credit card loans, in both static and revolving structures; and • working capital specialists – asset classes of working capital and invoices have been increasingly active of late.
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