securitization in emerging markets - world...
TRANSCRIPT
-1-
Adr
ian
Kat
z
May
15,
200
8
Secu
ritiz
atio
n in
Em
ergi
ng M
arke
tsP
repa
red
for:
THE
WO
RLD
BA
NK
-2-
Tabl
e of
Con
tent
s
I.Fi
naci
ty
II.Se
curit
izat
ion
III.
Fina
city
and
Em
ergi
ng M
arke
ts –
Cas
e St
udie
s
IV.
Fina
city
Sec
uriti
zatio
ns A
dd M
ore
Valu
e
V.C
onta
ct
App
endi
x:
A.
Rep
rese
ntat
ive
Tran
sact
ions
I.Fi
naci
ty
II.Se
curit
izat
ion
III.
Fina
city
and
Em
ergi
ng M
arke
ts –
Cas
e St
udie
s
IV.
Fina
city
Sec
uriti
zatio
ns A
dd M
ore
Valu
e
V.C
onta
ct
App
endi
x:
A.
Rep
rese
ntat
ive
Tran
sact
ions
-3-
I Fina
city
-4-
I.In
trod
uctio
n
Stra
tegi
c an
d in
vest
men
t pa
rtner
s in
clud
e A
BN
AM
RO
N.V
., A
mro
c In
vest
men
ts,
Ban
k of
Am
eric
a, E
uler
Her
mes
AC
I, K
lein
er P
erki
ns C
aufie
ld &
Bye
rs, a
nd T
exas
P
acifi
c G
roup
.
Ann
ually
, Fin
acity
’s m
ulti-
lingu
al a
nd m
ulti-
curre
ncy
serv
icin
g pl
atfo
rm:
Sup
ports
ove
r $15
bill
ion
in re
ceiv
able
flow
s A
t pea
k ha
s su
ppor
ted
appr
oxim
atel
y 1
mill
ion
oblig
ors
At p
eak
has
proc
esse
d ov
er 1
0 m
illio
n in
voic
es
Fina
city
has
wor
ked
with
sel
lers
and
obl
igor
s ba
sed
in a
ppro
xim
atel
y 80
cou
ntrie
s,
incl
udin
g: S
pain
, Fr
ance
, Ita
ly,
Turk
ey,
Rus
sia,
Ukr
aine
, U
.S.,
Can
ada,
Mex
ico,
A
rgen
tina,
Bra
zil,
Chi
na,
Indo
nesi
a, J
orda
n, P
akis
tan,
Phi
lippi
nes,
Uni
ted
Ara
b E
mira
tes
and
Sou
th A
frica
.
Fina
city
is a
lead
ing
prov
ider
of s
ecur
itiza
tion
solu
tions
:
-5-
I.Fi
naci
ty O
verv
iew
Low
er c
ost o
f fun
ds
Gre
ater
liqu
idity
from
hig
her
adva
nce
rate
s vi
a fo
reig
n as
sets
elig
ibilit
y an
d da
ily a
vaila
bilit
y ca
lcul
atio
ns
Red
uced
exe
cutio
n co
sts
Sim
plifi
ed
man
agem
ent
of
dom
estic
an
d co
mpl
ex
glob
al
secu
ritiz
atio
n op
erat
ions
True
sal
e tre
atm
ent
Ven
dor f
inan
cing
sol
utio
ns w
ithou
t the
cre
atio
n of
deb
t
Fina
city
’sun
ique
con
stru
ct a
nd e
xecu
tion
capa
bilit
ies
enab
le c
orpo
ratio
nsto
ben
efit
thro
ugh:
-6-
II Sec
uriti
zatio
n
-7-
Fina
city
pur
chas
es a
sset
s fro
m t
he
Sel
ler i
nto
a S
PE
cre
ated
and
ow
ned
by F
inac
ity.
Fin
acity
bec
omes
the
“S
ervi
cer o
f Rec
ord.
”
Fina
city
can
eith
er ta
ke o
ver
the
serv
icin
g or
sub
-ser
vice
bac
k to
th
e S
elle
r.
Fina
city
an
alyz
es
the
portf
olio
, un
derw
rites
ob
ligor
cr
edits
an
d de
term
ines
th
e su
bord
inat
ion
requ
ired
to p
rote
ct fo
r th
e ris
k of
loss
an
d di
lutio
n.
Fina
city
may
inc
lude
tra
de
cred
it in
sura
nce
to
incr
ease
liq
uidi
ty fo
r the
Sel
ler.
Bac
ked
by t
he a
pplic
able
cas
h flo
ws
of
the
asse
ts,
Fina
city
st
ruct
ures
se
curit
ies
to in
vest
men
t gra
de le
vels
.
Fina
city
iss
ues
secu
ritie
s (n
otes
) to
th
e se
lect
ed
inve
stor
to
fu
nd
the
Sel
ler’s
ass
ets.
Fi
naci
ty h
andl
es a
ll on
goin
g ad
min
istra
tion
and
repo
rting
fo
r the
sec
uriti
zatio
n.
II.S
ecur
itiza
tion
Stru
ctur
e
Inve
stor
sIn
vest
ors
Liqu
idity
Faci
lity
Pro
ceed
s“ T
rue
Sal
e”of
ass
ets
Sec
uriti
es
“Orig
inat
or”
Ser
vici
ng
of
asse
ts
- “O
wne
d/S
ervi
ced
“SP
E”” P
roce
eds
Propriet
ary
and C
onfiden
tial
-6 -
Trad
ition
al S
ecur
itiza
tion
Cha
lleng
esFi
naci
tySo
lutio
ns
Expe
nse
and
Com
plex
ityH
igh
upfro
nt c
osts
Hig
hly
cust
omiz
ed le
gal a
nd a
ccou
ntin
g re
quire
men
ts
Fina
city
’spr
oces
s m
akes
it a
fford
able
to s
ecur
itize
fo
r bot
h la
rge
and
smal
l dea
l siz
es.
Sta
ndar
diza
tion
of s
ecur
itiza
tion
docu
men
tatio
n,
proc
ess,
and
man
agem
ent,
mak
e Fi
naci
ty’s
appr
oach
sea
mle
ss.
Fina
city
per
form
s m
ost o
f the
det
aile
d su
ppor
t re
quire
d, fo
r you
.
Serv
icin
g an
d Fr
aud
Ris
kC
apita
l mar
kets
lack
of c
omfo
rt w
ith
serv
icin
g by
non
-inve
stm
ent g
rade
co
mpa
nies
Stan
dard
izat
ion
of s
ervi
cing
and
repo
rting
ar
e re
quire
d
Fina
city
pur
chas
es a
sset
s an
d be
com
es “S
ervi
cer
of R
ecor
d”, s
tand
ardi
zing
ser
vici
ng a
nd re
porti
ng.
Dai
ly m
onito
ring
of re
ceiv
able
s ac
tivity
min
imiz
es
both
ope
ratio
n an
d fra
ud ri
sk.
Cre
dit
Und
erw
ritin
gN
o st
anda
rd fo
r und
erw
ritin
g m
ultip
le s
elle
rs
and
thei
r obl
igor
s in
toda
y’s
mar
ket
Inte
grat
ed s
corin
g an
d ris
k un
derw
ritin
g in
co
njun
ctio
n w
ith E
uler
Her
mes
Fina
city
has
dev
elop
ed it
s ow
n st
anda
rd w
ith
prop
rieta
ry tr
ade
cred
it in
sura
nce
elim
inat
ing
com
mon
pol
icy
cond
ition
s.
Cro
ss B
orde
r R
isk
Exp
ort r
ecei
vabl
es p
ose
chal
leng
es n
ot
addr
esse
d ef
ficie
ntly
by
any
of th
e st
ruct
ures
in th
e m
arke
t tod
ay
Pol
itica
l ris
k, in
solv
ency
and
pro
tract
ed d
efau
lt co
vera
ge th
roug
h Fi
naci
ty’s
stru
ctur
e in
co
njun
ctio
n w
ith E
uler
Her
mes
II.C
halle
nges
Propriet
ary
and C
onfiden
tial
-9 -
Fina
city
can
pur
chas
e, c
onso
lidat
e, a
nd s
ecur
itize
for
eign
rec
eiva
bles
thr
ough
a
sim
plifi
ed s
truct
ure.
Fina
city
can
incl
ude
less
est
ablis
hed
oblig
ors
or o
blig
ors
from
mor
e ch
alle
ngin
g co
untri
es th
roug
h its
pro
prie
tary
trad
e cr
edit
insu
ranc
e w
ith E
uler
Her
mes
.
Fina
city
’sm
ulti-
lingu
al /
mul
ti-cu
rrenc
y pl
atfo
rm m
anag
es t
he o
pera
tiona
l an
d re
porti
ng re
quire
men
ts n
eces
sary
for c
apita
l mar
kets
fund
ing.
Ope
ratio
nal
and
lega
l is
sues
pos
ed b
y nu
mer
ous
coun
try j
uris
dict
ions
cre
ate
hurd
les.
A
BC
P c
ondu
its o
r as
set-b
ased
lend
ers
ofte
n pr
efer
not
to
tack
le t
hem
w
ithou
t Fin
acity
.
Fina
city
offe
rs a
pro
prie
tary
sol
utio
n to
sal
e tre
atm
ent
unde
r IA
S.
GA
AP
sal
e tre
atm
ent i
s fa
irly
stra
ight
forw
ard.
II.In
tern
atio
nal C
apab
ilitie
s
-10
-
III Fina
city
and
Em
ergi
ng M
arke
ts –
Cas
e S
tudi
es
Propriet
ary
and C
onfiden
tial
-13
-
All
Obl
igor
s fro
m n
on-O
EC
D c
ount
ries,
incl
udin
g:A
rgen
tina,
A
zerb
aija
n,
Bul
garia
, C
hina
, E
gypt
, In
done
sia,
Is
rael
, Jo
rdan
, P
akis
tan,
Phi
lippi
nes,
Rus
sia,
Sou
th A
frica
, U
krai
ne, a
nd th
e U
nite
d A
rab
Em
irate
s
A “B
”cre
dit r
atin
g fro
m S
tand
ard
& P
oor’s
Cro
ss-b
orde
r tra
nsac
tions
Mul
tiple
juris
dict
ions
III.
Alli
ance
One
Inte
rnat
iona
l –Th
e C
halle
nge
In e
arly
200
6, A
OI h
ad te
ns o
f mill
ions
of d
olla
rs in
rece
ivab
leas
sets
lock
ed u
p in
non
-OE
CD
cou
ntrie
s.
Propriet
ary
and C
onfiden
tial
-13
-
Inte
nsiv
e da
ta c
olle
ctio
n
A b
ankr
uptc
y re
mot
e st
ruct
ure,
via
Fin
acity
-ow
ned
SP
E
Trad
e cr
edit
insu
ranc
e fro
m E
uler
Her
mes
Invo
ice
verif
icat
ion
and
repo
sito
ry
III.
Alli
ance
One
Inte
rnat
iona
l –So
lutio
n
Thro
ugh
inno
vatio
n an
d fle
xibi
lity,
Fin
acity
ove
rcam
e th
ese
chal
leng
es w
ith:
III.
Alli
ance
One
Inte
rnat
iona
l –D
etai
led
Stru
ctur
e
Insu
ranc
e:Eu
ler H
erm
es
Fund
ing
Sou
rce:
Han
nove
r Fun
ding
Com
pany
LLC
Adm
inis
trato
r:SP
V A
ccou
nt
Fina
city
R
ecei
vabl
es
2006
-2, L
LC
Com
pany
:Al
lianc
e O
ne
Inte
rnat
iona
l
Obl
igor
s (C
usto
mer
s):
Cig
aret
te
Man
ufac
ture
rs
Pay
men
tsD
istri
butio
nIn
stru
ctio
ns
Sel
ler
VFN P&
I
Not
eP
roce
eds
Pur
chas
edR
ecei
vabl
es
Sale
Pro
ceed
s +
Ser
vici
ng
Fees
Col
lect
ions
Rep
orts
Rec
eiva
bles
Goo
ds &
Ser
vice
s
Rep
orts
Com
mer
cial
Pape
r
$
$
CP
-Inve
stor
s
OW
NE
R
CP
Dea
lers
-Mer
rill L
ynch
-Leh
man
Bro
ther
s-J
P M
orga
n C
hase
-Citi
grou
p
Full
com
plia
nce
with
regu
lato
ry re
quire
men
ts:
Exc
elle
nt ra
ting:
Pla
ced
in a
n S
&P
/Moo
dy’s
A1/
P1
rate
d C
P C
ondu
it
Off
bala
nce
shee
t: Tr
ue s
ale
treat
men
t acr
oss
com
plex
juris
dict
ions
Com
preh
ensi
ve tr
ade
cred
it in
sura
nce:
10
0% o
f obl
igor
s, w
ith 1
0% c
oins
uran
ce
Upd
ate:
O
EC
D re
ceiv
able
s su
bseq
uent
ly a
dded
in 2
008
for a
US
$ 10
0 m
illio
n fa
cilit
y si
ze
III.
Alli
ance
One
Inte
rnat
iona
l –Tr
ansa
ctio
n R
esul
ts
Faci
lity
Siz
e:
US
$ 55
Mill
ion
Mat
urity
: 3
year
sR
ate:
C
P +
200
bps
Win
ner o
f Eur
omon
eyTr
ade
Fina
nce
Mag
azin
e’s
‘Dea
l of t
he Y
ear’
Propriet
ary
and C
onfiden
tial
-13
-
2 V
EN
A
divi
sion
s:
Cov
isa
(gla
ss
cont
aine
rs)
and
Alc
ali
(indu
stria
l co
mm
oditi
es)
Cro
ss-b
orde
r, m
ultic
urre
ncy
oblig
ors
(US
$ an
d M
XP
$)
Con
tra a
ccou
nt, c
once
ntra
tion,
and
term
dis
coun
t iss
ues
Full
outs
ourc
ing
take
n ov
er fr
om p
revi
ous
fund
ing
sour
ce
Req
uire
d bo
th S
tand
ard
& P
oor’s
and
Moo
dy’s
ratin
gs
III.
Vitr
o VE
NA
–Th
e C
halle
nge
The
first
Mex
ican
dom
estic
trad
e re
ceiv
able
sec
uriti
zatio
n, re
gist
ered
with
the
CN
BV
.
Propriet
ary
and C
onfiden
tial
-13
-
Stre
amlin
ing
the
oper
atio
n by
st
anda
rdiz
ing
lega
l an
d ac
coun
ting
requ
irem
ents
Enf
orci
ng h
omog
eneo
us c
redi
t po
ol u
nder
writ
ing
for
a di
vers
e po
rtfol
io o
f ob
ligor
s
Ass
umin
g ce
rtain
dut
ies
and
risks
of t
he S
elle
r Ser
vice
r
Intro
duci
ng tr
ansa
ctio
n cr
edit
enha
ncem
ents
Effi
cien
tly s
truct
urin
g cr
oss-
bord
er m
ultic
urre
ncy
oper
atio
ns
Dili
gent
ly
wor
king
to
en
sure
bo
th
ratin
g ag
ency
re
quire
men
ts
wer
e ex
pedi
tious
ly m
et
III.
Vitr
o VE
NA
-So
lutio
n
Fina
city
’spr
oprie
tary
dea
l stru
ctur
ing
proc
ess
addr
esse
d th
ese
chal
leng
esby
:
Full
com
plia
nce
with
regu
lato
ry re
quire
men
ts:
Exc
elle
nt ra
tings
: AA
A.m
xS
&P
, Aaa
.mx
Moo
dy’s
Effi
cien
t ser
vici
ng c
onst
ruct
:
Fina
city
as
mas
ter s
ervi
cer
Fina
city
as
bond
adm
inis
trato
r
Gre
at li
quid
ity a
nd h
ighe
r adv
ance
rate
s:
100%
adv
ance
on
rece
ivab
les
Red
uctio
n in
the
reco
urse
to th
e co
mpa
ny fr
om 5
0% to
24%
,
III.
Vitr
o VE
NA
–Tr
ansa
ctio
n R
esul
ts
Faci
lity
Siz
e:
Sen
ior T
ranc
he -
MX
P$
550m
m /
Sub
ordi
nate
-U
S$
19m
m
Mat
urity
: 4
year
sR
ate:
TI
IE+
120
Bps
-18
-
IV Fina
city
Sec
uriti
zatio
ns A
dd M
ore
Val
ue
Propriet
ary
and C
onfiden
tial
-13
-
Clie
nts’
rela
tions
hips
w
ith
thei
r ob
ligor
s re
mai
n in
pl
ace
unde
r th
e se
curit
izat
ion
prog
ram
.
Fina
city
can
pro
vide
ser
vici
ng o
vers
ight
to
hand
le a
ll se
rvic
ing
func
tions
fro
m p
ost-i
nvoi
ce to
cas
h ap
plic
atio
n.
Fina
city
’spl
atfo
rm c
an c
onso
lidat
e ac
coun
ts r
ecei
vabl
e da
ta f
rom
mul
tiple
sour
ces.
Fina
city
will
han
dle
all
the
bond
adm
inis
tratio
n an
d re
porti
ng g
ener
ally
ha
ndle
d by
the
note
issu
er.
24
x 7,
w
eb-b
ased
re
porti
ng
prov
ides
re
al-ti
me
visi
bilit
y to
se
rvic
ing,
co
llect
ion,
and
rem
ittan
ce a
ctiv
ities
.
IV.
Serv
icin
g
To h
elp
miti
gate
ser
vici
ng ri
sk a
nd to
stre
amlin
e se
curit
izat
ion
oper
atio
ns,
Fina
city
typi
cally
act
s as
the
“Ser
vice
r of R
ecor
d”.
-20
--2
0-
IV.
Rep
ortin
g
Dai
ly m
onito
ring
and
repo
rting
to s
uppo
rt cl
ient
s, ra
ting
agen
cies
, and
in
vest
ors.
Flex
ible
repo
rting
with
ext
ensi
ve s
ortin
g an
d fil
terin
g ca
pabi
litie
s
Cus
tom
ized
repo
rts to
add
ress
spe
cial
requ
ests
and
requ
irem
ents
of a
ll tra
nsac
tion
cons
titue
nts
-Inv
esto
r, R
atin
g A
genc
y, In
sure
r, Tr
uste
e, a
nd
Cus
tom
er
Web
-bas
ed, r
eal-t
ime
visi
bilit
y
Ope
ratio
nal r
epor
ts -
Dai
ly, p
oint
-in-ti
me
stat
us, a
nd a
ctiv
ity re
ports
Pro
duct
ion
repo
rts -
Eve
nt b
ased
repo
rts (e
.g.,
fund
ing
even
t, se
ttlem
ent
even
t, m
onth
-end
bon
d ad
min
istra
tion)
His
toric
al re
ports
-Tr
ende
d da
ta w
areh
ouse
and
risk
ana
lysi
s re
porti
ng
Fina
city
repo
rting
cap
abili
ties
can
prov
ide
real
-tim
e vi
sibi
lity
to a
sset
act
ivity
.
-21
-
IV.
Rep
ortin
g
Rev
eals
val
uabl
e kn
owle
dge
and
info
rmat
ion
trapp
ed w
ithin
the
ass
et
proc
essi
ng c
hain
.
Pro
vide
s in
sigh
tful
reco
mm
enda
tions
fo
r im
prov
emen
ts
thro
ugho
ut
the
prod
uct s
ervi
ce a
nd d
eliv
ery
supp
ly c
hain
.
Pot
entia
l res
ults
incl
ude:
Impr
oved
sup
ply
chai
n ef
ficie
ncy
Sho
rtene
d sa
les
cycl
eIn
crea
sed
cust
omer
sat
isfa
ctio
nLo
wer
cos
ts a
nd b
oost
ed p
rofit
sN
o ad
ditio
nal c
ost t
o cl
ient
AD
DR
ESSE
S PE
RC
EIVE
D O
R A
CTU
AL
OPE
RA
TIO
NA
L A
ND
FR
AU
D
RIS
KS
Fina
city
’sse
rvic
ing
repo
rt ca
pabi
litie
s:
-22
-
V Con
tact
-23
-
V.
Fina
city
Con
tact
Adr
ian
Kat
zC
hief
Exe
cutiv
e O
ffice
rT:
203.
428.
3540
F:20
3.24
0.39
04E:
AK
atz@
Fina
city
.com
-24
-
App
endi
x A
Rep
rese
ntat
ive
Tran
sact
ion
Hig
hlig
hts
-25
-
July
200
2
$300
,000
,000
Trad
e R
ecei
vabl
es
Pro
gram
Sole
Arr
ange
r
$105
,000
,000
Trad
e R
ecei
vabl
es
Secu
ritiz
atio
n Pr
ogra
m
Sole
Arr
ange
r
$55,
000,
000
Trad
e R
ecei
vabl
es
Sec
uriti
zatio
n P
rogr
am
Sole
Arr
ange
r
$250
,000
,000
Trad
e R
ecei
vabl
es
Sec
uriti
zatio
n P
rogr
am
Sole
Arr
ange
rJu
ly 2
002
$40,
000,
000
Trad
e R
ecei
vabl
es
Secu
ritiz
atio
n Pr
ogra
m
Sole
Arr
ange
r
July
200
2
CA
D$5
5,00
0,00
0Tr
ade
Rec
eiva
bles
Se
curit
izat
ion
Prog
ram
Sole
Arr
ange
r
$150
,000
,000
Trad
e R
ecei
vabl
es
Secu
ritiz
atio
n Pr
ogra
m
Sole
Arr
ange
r
MXN
$550
,000
,000
Trad
e R
ecei
vabl
es
Secu
ritiz
atio
n Pr
ogra
m
Sole
Arr
ange
r
$150
,000
,000
Trad
e R
ecei
vabl
es
Secu
ritiz
atio
n Pr
ogra
m
Sole
Arr
ange
r
MXN
$270
,000
,000
Trad
e R
ecei
vabl
es
Secu
ritiz
atio
n Pr
ogra
m
Sole
Arr
ange
r
A.
Sel
ect T
rans
actio
ns
-26
-
Dis
clos
ure
This
pre
sent
atio
n is
for d
iscu
ssio
n on
ly.
It is
not
a c
omm
itmen
t by
Fina
city
to a
rran
ge o
r pro
vide
fina
ncin
g on
thes
e or
any
oth
er te
rms.
Te
rms
and
cond
ition
s de
scrib
ed h
erei
n ar
e su
bjec
t to
mod
ifica
tions
and
app
rova
ls.
With
out t
he p
rior w
ritte
n co
nsen
t of F
inac
ity, n
one
of th
e in
form
atio
n or
doc
umen
ts (o
r for
ms
of d
ocum
ents
) con
tain
ed h
erei
n m
aybe
(a)
us
ed fo
r any
oth
er p
urpo
se th
an y
our e
valu
atio
n of
the
trans
actio
n de
scrib
ed h
erei
n, o
r (b)
furn
ishe
d by
you
to a
ny o
ther
per
son
othe
r tha
n (i)
su
ch o
f you
r em
ploy
ees,
offi
cers
and
dire
ctor
s an
d le
gal,
acco
untin
g an
d ot
her a
dvis
ers
(col
lect
ivel
y, "r
epre
sent
ativ
es")
who
hav
e a
need
to
know
suc
h in
form
atio
n (o
r a n
eed
to re
view
any
suc
h do
cum
ents
orf
orm
s of
doc
umen
ts in
con
nect
ion
with
you
r eva
luat
ion
of th
e su
bjec
t tra
nsac
tion)
, are
info
rmed
by
you
of th
e co
nfid
entia
l nat
ure
of th
e in
form
atio
n an
d ar
e su
bjec
t to
appr
opria
te c
onfid
entia
lity
rest
rictio
ns, (
ii) a
s m
ay b
e re
quire
d by
app
licab
le la
w o
r reg
ulat
ions
or b
y an
ord
er o
f a c
ourt
or g
over
nmen
tal a
genc
y of
com
pete
nt ju
risdi
ctio
n, p
rovi
ded
that
yo
u gi
ve u
s pr
ior n
otic
e of
suc
h re
quire
men
t and
ord
er.