Collateralised Debt Obligations, with an Overview of the Condor Securitisation Programme

Company and Securities Law Journal, Vol. 18, August 2000

Posted: 8 May 2001

See all articles by Paul Ali

Paul Ali

University of Melbourne - Law School

Mark Tisdell

Citigroup, Inc. - Citigroup - Sydney

Abstract

This article explains the various types of Collateralised Debt Obligation (CDO) securitisations and provides an overview of "CONDOR" (Collateralised Originated Notes Diversified Obligor Revenues), a CDO securitisation programme established by Citibank in Australia, in late 1999. The article also discusses one of the major legal issues confronting securitisations in Australia: whether or not there has been a "true sale" of the securitised assets to the securitisation vehicle.

CONDOR has the ability to issue differentially-rated series of debt instruments against Australian government and corporate debt securities (including asset-backed securities), corporate loans, project finance loans, infrastructure finance loans, housing loans, trade receivables, auto receivables and other receivables. It is also authorised to implement synthetic securitisations of loans and other receivables.

Establishing that there has been a true sale of the assets being securitised to the securitisation vehicle is a necessary pre-condition to obtaining off-balance sheet treatment for those assets. In addition, where the securitised assets include loans, a true sale is required to ensure that the risk capital held against the loans is freed-up. This article examines the legal mechanisms for the sale of securitised assets in Australia, stamp duty-efficient sale structures, and the issue of whether notice of the sale must be given to the underlying obligors.

Keywords: Securitization, Collateralized Debt Obligations, Collateralized Loan Obligations, True Sale, Assignment

JEL Classification: G15, G21, G32, K22

Suggested Citation

Ali, Paul and Tisdell, Mark, Collateralised Debt Obligations, with an Overview of the Condor Securitisation Programme. Company and Securities Law Journal, Vol. 18, August 2000. Available at SSRN: https://ssrn.com/abstract=267313

Paul Ali (Contact Author)

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 1088 (Phone)
+61 3 8344 5285 (Fax)

HOME PAGE: http://www.law.unimelb.edu.au

Mark Tisdell

Citigroup, Inc. - Citigroup - Sydney

Level 40
Citigroup Centre 2 Park Street
Sydney NSW 2000
Australia

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