ABN AMRO launched its first securities arbitrage conduit, called North Sea, that will be fully integrated into the sponsor’s Tulip and Amstel conduits.
The program will consist of one or more separate asset purchasing vehicles, each with its own portfolio.
The conduit structure will incorporate commercial paper issuance and medium term note issuance (MTNs). North Sea is structured to accommodate the current accounting trends, introducing funding via repo facilities and extendable notes. The conduit also incorporates collateralized debt obligation (CDO) technology to size required credit enhancement and will be able to sell rated credit enhancement, as well as rated MTNs, in the future.
