Client Alert
Beginning June 10, 2013, many securitization issuers could be required to submit newly executed interest rate swaps for clearing under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) and implementing regulations. Most securitizations are currently structured such that swap providers are secured only by receivables or other collateral securing investors in the securitization. For these securitization issuers, the clearing process and posting of cash or highly liquid securities required for clearing will be prohibitively expensive and burdensome.