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Structured Finance

Cayman's top-class law firms specialise in capital markets and structured finance transactions for a global client base of institutional clients, and are a leading international provider of such services.

Typical structured financed transactions involve a debt issue made by a Cayman Islands corporation, trust, or partnership known as a special purpose vehicle (SPV) which then acquires the underlying assets from the promoting financial institution.

This allows the financial characteristics of underlying assets to be converted into readily transferable and marketable debt instruments issued by the SPV, which may comprise notes or bonds and which may be rated and listed.

Financing arrangements undertaken by SPVs encompass everything from the simple capital markets euro paper issues, re-packagings, aircraft and ship financing, to more complex securitised transactions involving acquisition by the SPV of real property mortgages, credit card or other receivables, finance leases or indeed interests in funds. In short, any financial or other asset that provides an income stream may be acquired by an SPV.

Cayman Islands law has facilitated the treatment of the SPV as a bankruptcy-remote entity specifically by the use of the charitable purpose trust, which is well-recognised in the financial markets in London, New York, and Tokyo, or the purpose trust which is formed under Caymanís STAR legislation.

Cayman SPVs also benefit from easy access to the listing facility of the Cayman Islands Stock Exchange (CSX). The listing rules for the CSX were the first of any exchange to be specifically tailored to facilitate the listing of securities of funds and SPVs.