ASSET TRANSFER MANAGEMENT

Cutwater has established a global reputation for assisting clients with structuring and managing asset transfer mechanisms. Examples include:

• Advising, structuring and currently managing a transferred pool of ABS and bank and finance assets on behalf of a large Japanese commercial bank
• Received a mandate as replacement manager on a pool of assets backing a large offshore vehicle for a global life reinsurance company
• Arranged the repackaging of a $300 million pool of residential mortgage-backed assets. This included advising the client on the regulatory, tax and structural aspects of the transaction and also assisting in the structuring of the asset transfer to a bankruptcy remote entity

The need to reduce earnings volatility and achieve balance sheet relief has driven our repack and asset transfer business over the last two years. Cutwater works very closely with market practitioners in the accounting and regulatory spheres in order to understand current and potential future effects of rule changes. This knowledge is then translated into tailor-made solutions for individual clients.

Issues that we consider in optimizing any asset transfer arrangement include:

• Credit assessments of bond pools or individual bond positions
• Bond pricing and analysis
• Asset transfer and asset management options
• Asset pool re-tranching and rating benefits
• Framework for investment criteria

Our structuring, legal and accounting teams collaborate to provide advisory services on regulatory and tax issues, including:

• Guidance on the effect of FASB (166/167) and IAS rule changes
• Advice on the position of accounting and regulatory entities on true sale of assets
• Consulting on methods of obtaining fair market value pricing of asset pools
• Guidance on Basle II and US Capital adequacy rules
• Determination of optimal jurisdiction and structure for asset pool and client base