Germany is simplifying true-sale securitizations in an
effort to encourage growth in the country's securitization
Legislation will come into effect in late July to eliminate
some of the insolvency and enforcement complexities in
true-sale securitizations. "Currently, legal structures rely on
a certain element of goodwill in terms of insolvency," says
Ralf Hesdahl, partner at Mayer Brown Rowe & Maw Gaedertz.
"The parties have to agree on trigger events, such as if
ratings fall under a defined level."
The legislation's main purpose is to provide beneficiaries
(such as noteholders) insolvency-proof access to the seller's
assets and collateral. A refinance register will be introduced
that will allow the creditor to claim the originator's assets
in the event of the originator's insolvency, without needing to
transfer the relevant collateral. An insolvency-proof special