Anzen Finance

Other Parties

A variety of other parties are typically involved in any given private securitization in order to assemble and maintain the deal structure. Such parties include:
  • Law Firms - Given all of the documentation and legal work required to execute a private securitization, law firms are essential parties. Typically, there is a law firm representing each transaction party and each law firm will be represented by lawyers specialized in structured finance
  • Trustee Banks - In transactions where the debt instrument is purchased by more than one investor, a trustee bank typically steps in to perform a variety of functions on behalf of the investor. These may include cash collections, cash distributions and holding the borrower accountable for other requirements under the debt instrument
  • Collateral Agents - Designated third parties that perform a variety of functions associated with the distinct asset pool including but not limited to collateral verification, double checking calculations relevant to the debt instrument's requirements and performing other administrative duties
  • Back-up Servicers - To mitigate the inherent counter-party risk that exists in the event the originator is no longer able to perform its servicing duties on the distinct asset pool supporting the debt instrument, some transactions include a third-party to step in. These third parties can be considered "hot", "warm" or "cold" depending on how quickly they can step in and assume the servicing requirements of the distinct asset pool
  • Rating Agencies - While more common across public securitizations, many private securitizations are also rated by a nationally recognized statistical ratings organization ("NRSRO"). These agencies will comprehensively evaluate the transaction, apply its merits to in-house ratings methodologies and ultimately provide a ratings report to inform investors of its assessment and rationale
  • Auditors - Many originators in private securitizations must require audited financials to provide comfort to all transaction parties. As such, auditors are typically involved at the originator-level and provide ongoing audit reports and audited financials
  • Independent Directors - The SPVs acting as a borrower in a bankruptcy-remote fashion typically require a 3rd party appointed independent director in order to carry out administrative duties on behalf of the SPV. This way, neither the originator nor the investors have any influence on how the legal entity itself is managed from a regulatory and legal standpoint.