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Benedicte Gravrand, Opalesque London.

Prime Capital Asset Management (PCAM)’s Issuance programme claims to offer investors a cheaper and more secure alternative to historic bank issuances and provides a ready platform for accepting new securitised investments.

For the past10 years, banks have dominated the $500bn+ securitisation market for institutional investors, seeking exposure to asset classes other than through direct investment (for tax, regulatory or accounting purposes). This securitisation took several forms (SSDs, certificates, MTNs etc.), but all constituted unsecured debt obligations of the issuer with no recourse to the underlying asset pool even if, as invariably the case is, those assets are held within the issuer’s trading book as its hedge.

The recent crisis has fundamentally altered the appeal of securitising hedge funds through direct bank issuance for the end investor. Banks themselves are also very limited in their issuance appetite, and prices have moved out significantly to reflect this reluctance to extend balance sheet. Though they have offered limited collateralisation, it is expensive and complex.

Investors are now seeking ways of restructuring existing holdings to eliminate bank credit risk; and as investment appetite for certain asset classes returns, credit risk mitigation structures will be critical.

PCAM started the programme the week-end Lehman’s collapsed, in September ‘08.

“This is a large part of why we did th......................

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