Cross-Border Securitization: 10 Things To Know About Securitizing Canadian Assets Into The U.S.

Cross-Border Securitization

Cross-border securitizations involving Canadian assets can take various forms. For example:

• A U.S. originator may have sold products to Canadian customers and wants to include the related receivables (owing by Canadians) as part of an otherwise U.S. securitization.
• A Canadian originator may complete a Canadian securitization (selling to a Canadian special purpose entity (SPE)) but wants to fund it with notes sold in whole or in part to U.S. investors.
• A Canadian originator may sell its assets directly to a U.S. SPE, perhaps in conjunction with parallel sales by its U.S. affiliates.

Although the Canadian and U.S. legal systems largely share a common heritage, there are some important differences to note when securitizing Canadian assets on a crossborder basis.