RiskSpan delivers asset finance and securitization solutions across a wide range of services for financial institutions, evaluating the benefits of securitization or increasing efficiency. Our industry professionals provide innovative solutions using a multi-disciplined team of capital markets, governance, data analytics, technology, and industry experts in securitization of multiple asset classes.
RiskSpan works closely with key business areas during each phase of the securitization process in order to help resolve critical issues as they arise.
Securitization Preparation Review
Prior to starting the process to complete an initial securitization, many organizations require a multi-faceted review of their current capabilities and the requirements of a securitization program. RiskSpan can assist your organization in assessing its ability to embark on a securitization program by evaluating the benefits of securitization, your business capabilities, and the processes that may need to be upgraded to support securitization.
- Initial Analysis of Securitization Program Economics; provide an initial assessment of the economic benefit of a securitization program
- Gap Analysis of Critical Organizational Capabilities; early identification of gaps and development of solutions that can be implemented in advance of securitization program activities
- Preparation for Rating Agency Review; support data needs and respond to questions
- Securitization Structure Options; multiple asset types including performing, re-performing, and non-performing residential mortgages, commercial mortgages, collateralized loan / debt / bond obligations (CLOs/CDO/CBO’s), automobile loans and leases, credit cards, home equity loans, equipment loans and leases, student loans, manufactured housing loans, franchise loans, timeshare receivables, and other esoteric assets
- Review of potential operational requirement issues; identification of data issues and technology upgrades needed to support a robust securitization program
- Identification of Securitization Transaction Partners, including investment banks, rating agencies, legal advisors, accounting firms, custodians, trustees, and other third party service providers
Securitization Process and Infrastructure Development
The complexity of a securitization requires an organization to develop new business processes that leverage subject matter experts from across different business units, deliver accurate data related to the assets being securitized, and implement new risk management and governance processes to mitigate risk to the organization. Drawing on our previous experience of securitizations and extensive technology resources, we help you perform a review designed to identify challenges and implement quick and effective solutions.
- Technology Infrastructure Development; assessment of whether your existing technology infrastructure has the capability to support the demands of a securitization program
- Accurate, Dependable Data; development and implementation of world-class data analysis and reporting tools that enable rapid analysis of many different asset classes
- Accurate Securitization Reporting; review of existing systems and, where necessary, design and implementation of reporting capabilities that are in line with the market standards
- Development and Evaluation of Origination and Servicing Practices; industry and securitization expertise to support your organization’s needs
- Rating Agency Review Preparation; development of presentation material
Before presenting analysis of the benefits of securitization program data to senior management, rating agencies, and other transaction counter-parties, your securitization program should complete detailed historical analysis on the assets being securitized and expectations for the performance of the assets being sold. Our professionals can help analyze historical data to estimate expected collateral performance and provide detailed reporting on the pool of assets being securitized.
- Data Aggregation; development of securitization data marts with aggregate data from within and outside the organization
- Data Cleansing and Normalization; support your firm’s effort to ensure data presented to internal and external stakeholders is accurate and consistent
- Portfolio Data Analysis; development of static pool analysis on the underlying collateral portfolio
- Model Development; development of statistical models used to estimate the expected performance of the asset being securitized, development of cash flow models to include different scenarios related to prepayment, default, loss, and other stressors
- Selection of Asset Pools; selection of assets using rating agency criteria
Transaction Management Support
RiskSpan professionals can support your organization’s securitization activities for a portfolio of assets. We can provide services in all aspects of preparing the transaction for sale, including preparation and review of disclosure documents, operative documents, and transaction settlement.
- Support marketing activities; facilitate the creation and delivery of marketing material trade terms to investors
- Support the negotiation and communication of trade parameters
- Coordinate activities of multiple business areas across the organization to ensure that deliverables needed to meet the transaction's ‘time and responsibility’ are met by all transaction participants
- Support timeline and transaction management with external counterparties including broker/dealers, investors, accounting firms and securitization service providers
- Review and comment on all transaction documents
Because investor demand decides the structure that will ultimately prevail, we will work with your senior management team and investment bank to ensure that the structure chosen is the most efficient and cost effective for all parties involved in the transaction.
- Cash-flow modeling; development of cash flow models for multiple asset types using a variety of tools (including Intex) and programming languages
- Analysis of Structure Options; present multiple structure options to senior management teams to help evaluate if securitization options are meeting corporate goals
- Transaction cash-flow tie-out; independent calculation of the security cash-flows based on the characteristics of the assets, weighted average lives, price/yields, discount margins, and any other cash-flow metrics included in the disclosure and marketing documents
Additional Securitization Support Services
RiskSpan can support you in developing and improving deal reporting and disclosures, particularly as it relates to changing regulatory requirements. Our work spans all associated efforts from programming changes to design, testing, and implementation. RiskSpan’s predictive modeling software can be used to track transaction issuance and performance on a single security or at a portfolio level in order to assist counterparties with analysis and decision making.
RiskSpan builds bond payment models starting from the deal documents and conducts quality assessment testing before delivery to the client. We document deal features in an abstract that includes the waterfall and reporting requirements. Our cash-flow models are completely transparent and documented to facilitate training and internal audit reviews.
RiskSpan specializes in performing valuation services for structured securities such as RMBS, CMBS, CDOs, and other types of securitized products, as well as whole loans. Our professionals review deal documents, model and analyze deal features, perform extensive research, and conduct benchmarking analysis in the capital markets to develop assumptions and generate discounted cash-flow valuations.
RiskSpan assists clients with evaluating and modeling various asset financing scenarios, including portfolio, warehousing, and securitization, as well as the features and risks of a range of financing options. We provide “investor ready" marketing models and analysis for capital raising purposes, in addition to credit models for ongoing surveillance and portfolio management.
Rating agencies and others may seek the presence of an independent verification agent within servicing advance deals or other types of securitizations. The verification agent periodically reviews the servicer's operations regarding the handling of advances and/or servicing operations for the purpose of ensuring that operational risks do not negatively impact advance or collateral cash-flow to the deal. The verification agent may also be contracted by the Issuer, Bond Administrator or other party to verify bond payments, outstanding principal, interest calculations, and other elements of the deal.