Case Study: Successful Securitisation of Real Assets in Switzerland

Introduction

The securitisation of real assets has become a pivotal financial strategy in Switzerland, offering a robust framework for businesses to optimize their asset management. By transforming illiquid assets into tradable securities, companies can unlock new streams of capital and enhance financial flexibility.

This case study explores a successful securitisation project in Switzerland, highlighting the key steps and benefits of this financial innovation.

Understanding Securitisation

Securitisation involves pooling various types of contractual debt, such as mortgages or loans, and selling their related cash flows to third-party investors as securities. This process can provide liquidity and reduce risk exposure for the originating company.

In Switzerland, the regulatory environment is highly supportive of securitisation, with well-defined legal structures and tax incentives that encourage businesses to engage in this financial practice.

Benefits of Securitisation

The primary benefits of securitisation include:

• Increased Liquidity: Converting assets into securities allows organizations to free up capital.
• Risk Management: By distributing risk to investors, companies can stabilize their financial standing.
• Access to Capital: Securitisation can provide access to a broader range of investors.

The Swiss Case Study

In this case study, we examine a Swiss real estate company that successfully securitised a portfolio of commercial properties. The company aimed to leverage its real assets to gain liquidity and access new investment opportunities.

The process involved collaboration with financial advisors and legal experts to structure the securities and ensure compliance with Swiss regulations. The company issued bonds backed by the cash flows from their properties, attracting both domestic and international investors.

Steps in the Securitisation Process

The securitisation process followed these key steps:

1. Asset Identification: Selecting suitable assets with predictable cash flows.
2. Structuring the Securities: Designing bonds that appeal to potential investors.
3. Regulatory Compliance: Ensuring adherence to Swiss financial laws and tax codes.
4. Marketing and Sale: Promoting the securities to attract diverse investors.

Outcomes and Impact

The securitisation enabled the Swiss company to raise significant capital, which was reinvested into expanding their property portfolio and enhancing operational efficiency. This strategy not only improved liquidity but also strengthened the company’s market position.

Investors benefited from stable returns and exposure to the Swiss real estate market, while the company reduced its risk profile by diversifying its funding sources.

Conclusion

This case study illustrates the potential of securitisation as a strategic financial tool in Switzerland. By leveraging real assets, companies can enhance liquidity, manage risk, and access new investment opportunities. As the financial landscape continues to evolve, securitisation remains a viable and advantageous option for businesses seeking to optimize their asset portfolios.