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Example
1
Let's take a family that owns an art collection and that wishes
to sell part of this collection. It could simply sell the
collection to the highest bidder by splitting up these works
of art.
With securitisation, it would be possible to transfer all
the art works to a securitisation vehicle that would issue
units or certificates.
The family would then set up a management company that would
act as the custodian and manager of the works.
The units or certificates would provide an entitlement to
any rise or fall in the value of the works of art.
The family could then sell all or some of the units or certificates
to third parties and thus receive cash; at the same time they
would retain the management of the art works.
Example 2
If a commercial company owns a tangible movable asset (equipment
haulage) which is subject to risks that it cannot or does
not want to control (aeroplane, boat, lorry, car fleet, etc…)
anymore.
It could thus transfer to a securitisation vehicle which would
be financed (either directly or indirectly by) one or more
investors.
The commercial company would thus receive cash against the
assignment of these movable assets and would not longer be
in charge of their management. It would no longer assume the
risks associated with their ownership.
The commercial company pays a lease back to the securitisation
vehicle for the use of these assets.
Example 3
Let's take a ship-owner who owns a yacht that he uses very
little.
He could set up a securitisation company administered by himself,
which would issue certificates.
He could thus sell these certificates to third parties who
in this way would finance the company, which would pay the
ship-owner the assignment price of the yacht.
The yacht may be leased and these proceeds would represent
the income of the securitisation company which would then
pay the investors a return in the form of fixed or variable
interest (a dividend).
Moreover, instead of a fixed or variable return, the certificates
could allow for investors to have limited rights of use of
the securitisation vehicle's assets (i.e. the yacht).
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