Institucional Financing through the use of Issuing Trusts
Issuing Trusts are the financial instruments used by private and public entities to obtain financing, through the issuance of Trust Stock Exchange Certificates and their placement either in the Securities Market, or with certain private, institutional or qualified investors.
The Issuing Trust is a legal instrument by means of which the Trustee, based on an underlying patrimony, issues Trust Certificates (credit securities).
Structured investment instruments can be aimed at sectors such as Real Estate, Debt and referenced to stock market quote indexes.
Through an Issuing Trust you can make:
- Public debt issuances: Trust Stock Certificates are registered in the National Securities Registry and are placed among the general investing public.
- Private debt Issuances: Trust Stock Certificates are not registered with the National Securities Registry and are issued to be acquired by certain private, institutional or qualified investors
Benefits for a Holder
The holder is the person who acquires the Fiduciary Stock Exchange Certificate.
- Safety: The Trust Certificate issued by an Issuing Trust is assigned a rating by a recognized Rating Agency, based on the issuer’s ability to meet its financial commitments and risk assessment.
- Rights: the holder of the Trust Stock Exchange Certificates acquires rights to pay an interest on the title, as well as the payment of the principal in a specific period, and in case of non-compliance with the issue, rights over a part of the assets of the Trust.
- Ease: in most cases, certificates are trading instruments easy to implement and allow you to invest without having to acquire all the assets.
- Transparency and reliability: the issuer of the Trust Stock Certificates must disclose the financial, accounting and information on the valuation of the certificates, as well as establish corporate governance.
- Backup: your interests are veiled and represented by a financial institution (Credit Institution or Financial Society) that serves as the Common Representative of all the holders of the Trust Stock Exchange Certificates.
Advantages for the contractor of an Issuing Trust
- A mechanism to obtain resources from the general investing public.
- Access to different markets at low cost.
- Diversification of options to obtain investment.
- There is a transfer of ownership or ownership of the assets or rights that make up the (underlying) assets of the Issuing Trust.
- In front of the holders, the assets of the Issuing Trust will be answered as far as is sufficient and reach.
- Allows the securitization of assets efficiently.
- The need to contract bridge loans (in the case of real estate projects) is eliminated.
Requirements
- Be a private or public entity.
- Provide documentation that proves its constitution, as well as any other required for the formalization of the fiduciary vehicle and issuance of the Fiduciary Stock Exchange Certificates.
LEGAL
Comply with the provisions established in the Ley del Mercado de Valores, Ley de Títulos y Operaciones de Crédito, Circular Única de Emisoras and other applicable provisions.