Securitisation investors believe that their own due diligence procedures will still be required on deals carrying the STS label, for fear they may lose the designation. Nevertheless, the STS framework is expected to lead to better quality ABS product, with reliance on the label increasing over time.
Henry Cooke, executive director at Gryphon Capital, commented at a recent PCS seminar that generally “investors will want to do their own due diligence, despite the specific 102 points that they would have to analyse under STS” to assess whether a deal comfortably meets STS requirements.
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