The last 18 months has not only seen an increase in the number of securitisations done by Irish originators, but also an increasing number of
foreign originated transactions on a true sale basis and through synthetic structures, plus an increase in repackaging programmes using Irish issuers. Why?
Securitisations and repackagings are not attracted to jurisdictions by low tax rates but by a regime of benign listing, bankruptcy and taxation laws. Ireland has had a favourable tax regime for securitisations and this has facilitated the execution of domestic mortgage securitisations and cross-border securitisations through the International Financial Services Centre (IFSC).
The taxation laws have been amended to enable securitisation companies to be established outside the IFSC, to facilitate profit extraction from these companies by originators and to deal with the income tax position of holders of notes.
With investor demand for EU issuing companies, this has caused many London-based arrangers to look at Ireland. A further impetus has been given
by difficulties being experienced in obtaining revenue rulings in some of the more traditional EU issuing jurisdictions. The Irish regime, like the UK one, is not dependent on Inland Revenue rulings to execute securitisations.
Below are some of the attractions of Ireland as an issuer jurisdiction:
Taxation of the issuer
Deductibility for interest payments in Ireland was predicated on a company carrying on a trade. Because of the questionable trading status of issuers, facilitating legislation was introduced to allow interest deductibility. To qualify for this treatment, the issuer must:
