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Austrian Federal Economic Chamber, Division Bank and Insurance

We propose that only (i) similar underwriting, (ii) uniform servicing and (iii) the same asset category are considered as criteria for homogeneous pools. If in addition the proposed risk factors are applied, available pools for securitization are significantly decreased. The due to the risk factors lower available volumes especially for medium and smaller banks would in combination with the newly proposed intensive disclosure and STS notification requirements result in the STS label not being used by most originators and this would not lead in the intended revival of the European securitization market.

Existing European securitization transactions such as mixed amortising/bullet or collateralized/uncollateralized consumer or SME pools as well as retail/commercial auto leases have shown very strong performance even during the financial crisis years. Investors have been used to and able to analyze and perform robust due diligence of these pools for many years. A further unproportionate differentiation based on risk factors will lead to concentration in smaller portfolios and prevent especially medium and smaller banks to compile an appropriate portfolio size and exclude them from securitization.

More clarity would be appreciated on Art. 1 (d) “at least one” risk factor needs to be considered: Does this mean a SME/corp pool Art. 2 (d) needs to apply one risk factor that the originator can choose such as the same jurisdiction or all seven quoted ones in Art. 3 (d) need to be applied?
In Art. 3 (e), (f) and (g) it seems that there is a typo in the letters to which is referred in Art. 2
As mentioned in the notes the risk factors under (d) should be disregarded in the homogeneity assessment.
As mentioned in the notes with the unproportionate further decrease of available pools the full potential of STS-securitisation cannot be used and both customers and small markets such as CEE will not be able to benefit from the STS securitisation initiative.
Risk factors should be disregarded in the homogeneity assessment.
We agree with the list of asset categories.
We strongly propose no further differentiation between SMEs and Corporates as the available portfolios for small and medium banks would be considerably decreased.
Please see notes and answers to Q1, Q2 and Q3 above.
Risk factors should be disregarded in the homogeneity assessment.
Risk factors should be disregarded in the homogeneity assessment.
Risk factors should be disregarded in the homogeneity assessment.
Risk factors should be disregarded in the homogeneity assessment.
Materiality thresholds would not be needed if risk factors are disregarded.
We prefer that risk factors are not included in the homogeneity definition also not in the alternative option under underwriting standards. The effect would be the same: Pools would need to be decreased as eg the underwriting standards for private autoleases versus corporate autoleases might slightly differ due to the different borrower characteristics.
If risk factors are applied, at least some institutions would not have large enough autolease pools for their securitization transactions as well as too small SME/corp pools.
Risk factors should be disregarded in the homogeneity assessment.
See answers to Q16 and Q17.
Dr. Franz Rudorfer
+43 (0)5 90 900-3131