Whole Business Securitization in Emerging Markets

Abstract:     
This short article, written for a symposium on securitization in emerging markets, discusses whole business securitization. Whole business securitization is a transaction structure used in countries with creditor-friendly bankruptcy regimes more friendly than the United States's regime. Whole business securitization specifies the manner in which a firm's business will be structured if it becomes bankrupt; the structuring expenditure is worthwhile in a regime where secured creditors' rights are fully honored. The article considers the extent to which the transaction structure will be useful in emerging markets countries. After the first transaction, in Malaysia, the structure is sure to be used again. But, not surprisingly, the structure is no panacea for the difficulties emerging markets firms encounter in raising capital.

Number of Pages in PDF File: 6

Keywords: bankruptcy, securitization, whole business securitization, creditors' rights, transaction structures, emerging markets

JEL Classification: F0, F3, G0

Accepted Paper Series