The establishment and provision of German SPVs, which are regaining relevance for German originators in the course of the ECB's PEPP (Pandemic Emergency Purchase Programme), can also be established in the usual manner and within the usual process times.
TSI Services GmbH (a wholly owned subsidiary of True Sale International GmbH) has been providing special purpose vehicles (SPVs) under German law since 2005. In more than 150 transactions (as of March 2021), German and other originators have already taken advantage of German SPVs as part of the securitisation process.
The provision of a German SPV via TSI is an established market standard that is well known to all supervisory authorities, the ECB and all other market players. Two stages are involved:
The individual steps are as follows:
1. Commissioning of TSI Services and conclusion of the agency agreement
The establishment stage starts with the conclusion of an agency agreement between the mandator and TSI Services. The agency agreement contains the instruction to provide the SPV and to liquidate it (at the end of the transaction). TSI Services provides the mandator with a short project schedule, in which all steps up to the final provision of the SPV are documented.
2. Agreement on the SPV’s name and articles of association
The next step is to decide on the SPV’s name and to draw up its articles of association and have them approved by the appropriate bodies (Chamber of Industry and Commerce, notary).
3. Meeting with a notary to establish the SPV and appoint the managing directors
The declaration of establishment of the SPV must be notarised. Two employees of TSI Services are appointed as managing directors of the SPV. This has the following advantages for the mandator:
4. Preparation and handover of the documents for the GmbH/Unternehmergesellschaft (limited liability)
TSI Services provides the mandator with all documents needed for the establishment process:
5. Company entry in the trade register
When the company has been entered in the trade register at the local court, it acquires legal capacity. The establishment of the SPV is thus concluded.
6. Coordination and issue of the certificate of compliance with the endowment criteria and initiation of the endowment procedure with the three foundations
In the second stage, TSI Services transfers the shares in the SPV to three charitable foundations on the TSI securitisation platform; this is referred to as "endowment". For each foundation, the originator must issue a certificate of compliance with the endowment criteria. TSI Services provides support for the preparation of the necessary documents, handles the entire coordination process with the foundations and obtains the necessary authorisations and resolutions.
7. Designation of the corporate services provider and auditing company
TSI Services appoints the corporate services provider and the auditor on behalf of the mandator.
8. Transfer of company shares and appointment of the corporate services provider as a managing director
At a further meeting with the notary, TSI Services initiates the appointment of the new managing directors and then the future auditor. Please note that the date set for endowment must be BEFORE the transaction is closed!
9. Documents presented to the mandator and corporate services provider and provision of a German SPV
When the shares have been transferred at the meeting with the notary, the SPV is immediately available for use in the planned securitisation transaction. The change of managing directors also takes legal effect at that meeting.
Finally, TSI Services provides the mandator and the corporate services provider with all SPV documents.