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ARCHIVE | Criteria | Structured Finance | Legal: Independent Directors' Role Clarified For English SPEs Dec 06
Standard & Poors, Dec 2006
Abstract
Some market participants have questioned why independent directors are considered a necessary component of the SPE criteria if the risk of administration could be minimized through additional structuring. This question has been raised in the context of requests for rating affirmations regarding existing corporate securitizations and certain CMBS transactions involving an English SPE. On Dec. 16, 2005, Standard & Poor's Ratings Services published amended criteria for English SPEs. These criteria made clear that, for future transactions, Standard & Poor's requests that a bankruptcy-remote English SPE has and maintains an independent director. This article confirms the reasons why the independent director component of the SPE criteria is important. The requirement applies not only to new transactions, but also for transactions seeking...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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