Structured Finance

The Need for Structured Solutions in LATAM & Humboldt’s Response to Our Clients

Highlights

  • The use of offshore companies, foundations, or trusts is no longer viable in most LATAM countries to provide innovative solutions for corporate and high net worth clients. Regulatory changes of this nature in many LATAM countries implies there is a sizeable need for securitizations and other structuring tools to provide much needed asset protection for corporate and HNWI clients. To address this need, Humboldt has put together a team of dedicated executives with the experience and know-how to deliver effective structured solutions for our clients.

  • Humboldt does not sell products, it finds solutions for very specific needs that it identifies with its clients. This approach emphasizes a service to design the products with the client to suit their requirements not the creation of products for sale in the marketplace.

  • In response to current market needs, Humboldt provides a proprietary exchange-traded product (note) that has an ISIN number, is in Euroclear, and holds underlying assets; thereby enabling Humboldt to tailor unique asset protection solutions for our clients; through a combination of insurance products and or publicly traded companies, and the issuance of Euroclear notes.

  • Humboldt is currently using these same vehicles to structure securitized debt instruments to finance Latin American middle market corporations, while distributing these securities to qualified institutional investors.

iris

 

 

 

 

 

  • The issuance of publicly traded credit linked notes offers a sophisticated methodology to fund your Latin American company providing benefits no longer possible with traditional models.

  • IRIS is an International securitization company in Europe, registered and domiciled in Belgium that is able to issue notes in several jurisdictions, including the UK and Luxemburg.

  • IRIS can issue dematerialized international obligations such as Asset-Backed Securities (ABS), with an International Securities Identification Number (ISIN). These are settled on key international inmobilization systems such as Euroclear or X/N.

  • Humboldt’s access to IRIS and and other securitization firms that work with Citibank, Proskauer and Andbank  gives it the capability of executing solutions via the issuance of publicly traded notes.

IRIS: General Structure

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IRIS: Advantages

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Example: Structured Solution 

Using Consumer Loans as Collateral to Issue a Publicly Traded Note

Objective:

  • Provide a structure that offers greater security, confidentiality, and flexibility, with maximum control of the underlying assets.

Solution:

  • Channeling the investment through an international structured note based on the underlying portfolio of auto loans. The Structured note will be deposited with the institutional or private investor’s preferred custodian.

Phase 1 of Investment Process

Example: Structured Solution:

Using Consumer loans as Collateral to Issue a Publicly Traded Note

Benefits:

I. Internationally publicly traded credit-linked Note:

  • Underlying security of a portfolio of assets.

  • Cash flows from the note to the investor are net of taxes (investor will be responsible for taxes in their home country).

  • The Note is transferable.

  • The Note can serve as collateral.

II.Secure Investment:

  • Underlying assets placed in a Trust and Custodian with a strict mandate to direct all cash flows for the payment of the Note.

  • Overcollateralization: The underlying portfolio has a value of more than 100% of the face value of the note.

  • Replacement of non-performing assets: Up to 5% of underlying assets past due for more than 90 days.

Additional Structured Products Offered by Humboldt

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