Taiwan

SUPPLEMENT - THE 2004 GUIDE TO STRUCTURED FINANCE - June 22, 2004

Taiwan's Ministry of Finance (MOF) recently approved its first real estate securitization project. The project is based on the securitization of the building, land and rental income streams of the IBM building, a commercial building in Taipei. This deal is Taiwan's first approved real estate securitization project, and represents another milestone in the development of Taiwan's securitization market.

In a real estate securitization deal, an originator transfers the relevant real estate property to a trustee, typically a bank (in Taiwan, a trust is not a distinct legal entity from the trustee). The trustee then issues notes to investors, with full recourse against the entrusted building, land and tenancy agreements. The project must be structured pursuant to a securitization plan in compliance with the Real Estate Securitization Law (the RESL) and approved by the MOF. To comply with the RESL, the plan must provide details for various transactions to transfer the title of the building and the land from the originator...



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