Over the last 15 years Ireland has developed a position as a global leader in the provision of securitisation services.
- With the benefit of a legal, regulatory, and fiscal regime that recognised the value of structured finance to the broader economy, Ireland became a location of choice for international banks that wished to raise funding on the international markets.
- At its height this activity employed over 1,000 people and was a significant contributor of direct and indirect taxation. Despite the significant slowdown in this area, much of the employment has been retained to meet the funding needs of domestic banks, and to administer existing transactions.
- Securitisation is a process by which assets are financed in the capital markets based on their intrinsic credit strengths, independent of the creditworthiness of the owner/originator of the assets. Typically the originator sells a portfolio of assets to a special purpose company which in turn funds the acquisition by issuing rated debt. Repayments on the debt are made with the collections from the assets with no recourse to the originator. In each transaction, different tranches will be offered to different investors depending on their investment objectives
- Ireland’s role in the international securitisation industry has primarily been as a location for the listing and administration of securitised instruments.
- The Irish Stock Exchange has developed an international reputation for the listing of debt instruments and the number of issues listed on the ISE increased rapidly in recent years, although the global number of new issues dropped considerably during the financial crisis.