GCR Publishes a Special Report on the Importance of Portfolio Covenants and Early Amortisation Triggers in Structured Finance Transactions
06 July 2021 – GCR Ratings (“GCR”) has published a Special Report explaining the significant role of portfolio covenants and early amortisation triggers in Structured Finance transactions. The report explains how portfolio covenants and early amortisation triggers are used to contain the risk caused by the purchase of new assets by a Special Purpose Vehicle’s (“SPV’s”) portfolio during the revolving period and how they are used to safeguard Noteholders against a potential deterioration of the transaction’s performance.
The Special Report also provides some key insights on how such covenants and triggers are used by GCR when conducting its rating analysis and how they may affect its credit enhancement calculations in a targeted rating scenario.
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