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Banking & Capital MarketsSecuritisation –services to originators*

Securitisation – services to originators PricewaterhouseCoopers1Making life easier for originatorsWhether you are securitising for the first time or are a repeat issuer, the PricewaterhouseCoopersEuropean Structured Finance Group (The ‘ESFG’) can provide you with a range of services which aredesigned to meet your needs and help ensure that the transaction runs smoothly and efficiently.Companies considering securitisationfor the first time often find the processdaunting. Evaluating whether securitisationis the right business option and thendealing with the practical problems ofimplementing a transaction can absorba considerable amount of managementtime and detract from the day-to-dayrunning of the business.Who we areThe ESFG, part of the Global StructuredFinance Group at PricewaterhouseCoopers,is a dedicated team of securitisationspecialists based in London withmembers in all major European countries.The group offers a wide range of servicesto originators who are consideringsecuritisation for the first time or areexperienced repeat issuers.ESFG provides independent advice andpractical solutions using a multi-disciplinedteam of capital markets, corporatefinance, accounting, tax, IT and industryexperts who specialise in securitisations.Working closely throughout each stage ofthe transaction, ESFG help resolve criticalissues as they arise.PricewaterhouseCoopers refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

Securitisation – services to originators PricewaterhouseCoopersFeasibility reviews Our experience with a wide rangeof asset classes allows us to provideclients with a variety of suggestionsfor structuring their transactions.We can identify whether a conduitor term structure is more appropriateand meets your funding requirementsand then evaluate the available optionsand the implications of each.A feasibility review ensures thatsecuritisation supports your fundingobjectives and business strategy.We can assist you in evaluating the costand benefits of securitisation, whethera conduit or stand-alone transaction,and ensure that it is appropriate toyour particular circumstances. TypicallyPricewaterhouseCoopers run workshopsfor client staff involved which help tomobilise rapidly the project and revealpotential issues. Identifying critical issues andpotential showstoppersBefore too much is invested in yoursecuritisation programme, ESFG willconfirm that securitisation is a viableoption given the characteristics ofyour asset pool. We will also identifycritical tax issues (corporation tax,stamp duty and VAT), accountingtreatments (UK, IFRS, US and otherEuropean GAAPs) and regulatoryissues. Identifying potential rating agency issuesESFG has been involved in hundredsof securitisation transactions overthe last ten years. We have extensiveknowledge of specific criteriathat rating agencies require whenreviewing a transaction.Drawing on our previous experience ofsecuritisations and extensive IT resources,we can help clients perform a reviewdesigned to identify likely problems andimplement quick and effective solutions.Our services include: Identify potential service providersUsing information collected during thefeasibility review, ESFG can gaugeinitial interest from investment banks,resulting in more efficient biddingfor a client’s securitisation mandate.Additionally, ESFG will assist the clientin the selection of conduits, SpecialPurpose Entity (‘SPE’) locations,trustees, legal advisors and other thirdparty service providers.Operations review andinfrastructure preparationInvariably practical problems arise ina company’s ability to provide historicaldata and information concerning theasset pool with its ongoing ability to meetservicing and reporting requirements.Systems evaluationESFG will determine whether yourexisting system is sufficiently robustand has the flexibility to address theservicing and reporting requirementsof a securitisation. Also, ESFG willensure that the data can be quicklyexchanged with outside parties after atransaction closes (trustees, back-upservicer, rating agencies etc).Review of potential operational issuesIT and systems problems preventmany transactions from proceedingpast this stage. Using industry andrating agency standards, ESFG willidentify critical data and systemsrequirements and propose solutionswhere needed.Key features of the feasibility studymay include: Initial assessment of structuring optionsAssessment of underwriting standardsand collection policyESFG will compare the client’sservicing capabilities with the existingrequirements and best practices ofthe market and determine whether theclient has sufficient capacity to servicea securitisation transaction. If needed,ESFG can design and implementIT servicing solutions that are in linewith current market standards. Review report generation capabilitiesThe ability to generate accurateperiodic reports is essential to themanagement of all securitisations.ESFG can review existing systemsand, where necessary, design andimplement reporting capabilities thatare in line with the market standards,and with the Regulation AB Standardfor SEC registered issuers.End-to-End SecuritisationFeasibility ReviewsOperations ReviewInfrastructurePreparationCollateral AnalysisPreparation forRating AgencyReviewStructuring ServicesSecuritisation Transaction ServicesSource: PricewaterhouseCoopers2Pre-closingTransaction ServicesPost-closingTransaction Services

Securitisation – services to originators PricewaterhouseCoopers3Structuring servicesBecause investor demand decides thestructure that will ultimately prevail, wewill work with your investment bank toensure that the structure chosen is themost efficient and cost-effective for allparties involved in the transaction.Our services include: Cashflow modellingBy developing securitisation cashflowmodels for our clients, ESFG canclearly illustrate to our clients how thesecuritisation programme will work. Collateral analysisBefore presenting asset-specificinformation to rating agencies, originatorsshould undertake a complete review toconfirm historical performance of theassets being securitised. Transparentreview and analysis of underlying collateralfor a transaction can save an originatormoney by translating into a higher ratingby the credit agencies.Our services include: Portfolio data analysisESFG will conduct a static pool analysison the underlying collateral portfoliowhere we will provide an in-depth lookat the portfolio’s performance overa specific period of time. Asset file reviewIn addition to the static pool analysis,ESFG will review physical asset filesto check for completeness of originalloan documentation, and the accuracyof data extraction from the originatorsIT system. The accounting and regulatorytreatment of a transaction is oftencritical to a client. ESFG has wideexperience creating structures whichmight suit the issuer best from anaccounting, tax and regulatoryperspective.Ensuring saleability of assetsUsing rating agency eligibility criteriastandards and utilising our experiencewith a wide range of asset types,ESFG will help select the optimal poolto be securitised.Maintaining data confidentialityESFG is sensitive to our client’sconcerns for data confidentiality andwill keep disclosure of closely heldcustomer information to a minimum.Prepare institution for ratingagency reviewAfter our in-depth analysis of our clients’collateral, systems and operations, ESFGwill work closely with the client to ensurethe best presentation of their positionto the rating agencies who, in turn, willdetermine the overall funding costs byassigning ratings to the offered notes.Resolve outstanding tax, accountingand regulatory issues Customised structuringGiven a client’s collateral and fundingobjectives, ESFG will assist indetermining the most efficient typeof securitisation needed. For example,warehouse versus term, revolvingversus non-revolving etc.Pre-closing transactionservicesESFG’s traditional securitisation servicesrevolve around comforting informationcontained in the offering circular ormarketing materials. These services oftenbegin with data preparation and collateralfile due diligence and continue throughcomforting collateral stratification tablesand data attributes listed inthese documents.Our transaction closing services teamprovides analytical and cashflowmodelling services in a timely manner,fully supporting each transaction.