Spanish securitizations are in store for an early Christmas gift as the push for changes to the existing securitization law will yield some result before year-end. The competitive handicaps that have dampened growth in certain areas of the Spanish securitization market are at the forefront of the changes sought by market participants. These changes will potentially give Spain the footing needed to put it at the top of the ranks for European ABS issuance.
Earlier this month the European Securitisation Forum (ESF) filed a letter to the Spanish market regulator recommending changes to the Spanish Securitisation law. The ESF has requested amendments to Spanish bankruptcy laws allowing companies to securitize future cashflows. "Specifically, the ESF has asked for clarification that future flows from securitized assets do not form part of the insolvent originator's estate," explained Deutsche Bank Securities analysts. "We note that French securitization market participants lobbied for similar modifications to their legal framework in 2003, but the Senat rejected changes to the enforceability of the transfer of future receivables to French issuing vehicles."