HSH Nordbank recently launched its new structured investment vehicle (SIV), Carrera Capital Finance. Carrera is a flexible platform that incorporates recent innovations and developments in SIV technology. The Jersey-domiciled company is the first SIV to be launched by a German landesbank, and incorporates sub-portfolios that can be made available to third-party asset managers.
An SIV is a bankruptcy remote, limited purpose vehicle that profits by taking advantage of the credit spread differences between the net yield on its portfolio of assets and its weighted average cost of funds. SIVs raise money continually by issuing a risk-adjusted mixture of capital and debt securities, including commercial paper, medium-term notes, subordinated debt and equity. SIVs invest this money in a market-risk neutral portfolio of high-quality (generally at least investment grade) securities, subject to strict investment policies.
Legal structure
The new SIV's principal issuing company, Carrera Capital Finance Ltd, is a bankruptcy-remote special purpose company...