TAILIEUCHUNG - PAUL HASTINGS STAY CURRENT: A CLIENT ALERT FROM PAUL HASTINGS

On July 15, 2008, in the wake of the failure of Indymac Bank – one of the largest bank failures in history – and a mounting cloud of uncertainty enveloping the banking industry, the Federal Deposit Insurance Corporation (“FDIC”) issued its Final Covered Bond Policy Statement (“Final Policy Statement”). In a move many view as an effort by the FDIC to bolster the mortgage market and provide banks with a new liquidity tool (and funding alternative to the struggling securitization market), the Final Policy Statement may open the way to a . market in covered bonds. Though covered bonds have existed and flourished in European markets, a . market for these bonds has faced. | The Rise of Covered Bonds BY JOHN DOUGLAS ERICA BERG AND KEVIN PETRASIC On July 15 2008 in the wake of the failure of Indymac Bank - one of the largest bank failures in history - and a mounting cloud of uncertainty enveloping the banking industry the Federal Deposit Insurance Corporation FDIC issued its Final Covered Bond Policy Statement Final Policy Statement . In a move many view as an effort by the FDIC to bolster the mortgage market and provide banks with a new liquidity tool and funding alternative to the struggling securitization market the Final Policy Statement may open the way to a . market in covered bonds. Though covered bonds have existed and flourished in European markets a . market for these bonds has faced regulatory uncertainty making depository institutions hesitant to participate. The Final Policy Statement alleviates some of these concerns in an attempt to invite more players to the market. What is a Covered Bond A covered bond is a debt security issued by a depository institution and backed by an identifiable pool of mortgage loans over which the covered bondholders have recourse. In the event of the insolvency of the issuing bank the pool of mortgage loans or cover pool serves to satisfy the covered bond debt and is separate and distinct from the issuer s other assets. Unlike traditional mortgage securitizations covered bond issuers maintain the mortgage loans on their balance sheets and retain the risk of loss with respect to the pool of mortgage loans. In contrast securitizations are structured to transfer the risk from the bank at the time of the issuance of the securities although this has numerous caveats as we have seen over the past year and the assets are transferred to a special purpose vehicle SPV . While security holders of traditional securitizations rely on cash flow from the securitized pool of assets maintained off-balance sheet covered bondholders rely on the issuer for payment which is not tied to the performance of the

• Ngân hàng - Tín dụng
• Chemotaxonomic Study
• Quinone Compounds
• Heartwood
• Javanese Teak
• Using GC MS
• Gas Chromatographic
• Compounds in Field Peas
• Chemotaxonomic
• Study Based