By James Bagnall and Michael Johns
The use of offshore special purpose vehicles ("SPVs") in securitisation transactions is a long- established practice. The Cayman Islands continue to enjoy a dominant role in this field, which they have attained by offering the following key legal, political and professional elements that arrangers, originators and investors seek out:
(1) a cutting-edge legislation (the result of close co-operation between the public sector and government), a creditor-friendly legal system based on English common law, recognition of foreign law-governed security interests and the absence of direct or indirect taxation;
(2) a stable political and economic environment, the result (in part) of the Cayman Islands’ status as a British Overseas Territory, which has supported the AAA rating of Cayman Islands SPVs by international rating agencies; and
