Creditors drive Siv restructurings

The diverse creditor bases of structured investment vehicles are driving the restructuring of Sivs that don't have bank sponsorship.

Sivs are being restructured through receivership proceedings to execute a sale that doesn't require creditor approval. "Receivers do consult with creditors as interested parties," said one panellist, "but they effectively negotiate a pre-package receivership sale. Creditors are given a Chinese menu of options such as taking control of the assets, moving them to a new structure or taking the cash."

The number of creditors of a Siv varies from 15, for a small vehicle, up to around 60. Only a proportion of these sit on the creditors' committee.

Bank-sponsored Sivs have been supported by their parent institutions which have provided liquidity or taken...