SWITZERLAND Law and Practice Contributed by: Johannes Bürgi, Roger Ammann, Lukas Wyss and Maurus Winzap, Walder Wyss Ltd
2. Roles and Responsibilities of the Parties 2.1 Issuers The issuer in securitisation transactions is a (Swiss or foreign) SPE that is structured in a bankruptcy remote way, acquires the assets to be securitised from the originator and issues debt financial instruments. In contrast, in Swiss covered bond transactions, the issuers are operating entities that originate the assets serving as cover pool (such as banks as originators of residential and commercial mortgage loans) and transfer such cover pool assets to the guarantor for security purposes. 2.2 Sponsors As Switzerland has not adopted any securitisa - tion legislation, there are no specific respon - sibilities or roles that would be assigned to a sponsor in Swiss securitisation transactions. The term “sponsor” is thus commonly referring to the originator as the entity that originates the underlying assets and initiates the securitisation transaction. 2.3 Originators/Sellers Originators in Swiss securitisation transactions are typically operating entities that generate the underlying assets to be securitised. In the course of the securitisation transaction, they transfer the assets to be securitised to an SPE against payment of the considerations. Typically, also the servicing of the assets is delegated by the SPE to the originator as the initial servicer. Recently, the main originators of public ABS have been active in the auto leasing business and credit card business. In addition, there have been an increasing number of private ABS trans - actions with originators being active in a vari -
foreign SPE is used, which depend in particular on the underlying assets that are being securi - tised. In particular, in a transaction where the underly - ing asset relates to real estate located in Swit - zerland, special care must be given when using non-Swiss SPEs due to restrictions under the Federal Act on the Acquisition of Real Estate by Persons Abroad (known as the “Lex Koller”) and also owing to the fact that special cantonal with - holding taxes may be incurred on any interest payment secured by Swiss real estate. In addition, interest payments on debt instru - ments issued by a Swiss SPE (or a Swiss origi - nator in the case of a covered bond) are typi - cally subject to Swiss withholding tax at a rate of 35%. Structuring a transaction using non-Swiss SPEs in view of the Swiss withholding tax is in principle possible but adds much complexity to the structuring process and care must be given in view of a strong focus on the true sale analysis from a tax perspective. Furthermore, Swiss originators that do not have any presence abroad typically prefer the use of a Swiss SPE for cost-efficiency and organisational purposes. 1.5 Material Forms of Credit Enhancement Swiss securitisation transactions can ben - efit from various forms of credit enhancement, including subordination, over-collateralisation and cash reserves, subject to structuring con - siderations on a case-by-case basis.
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