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Chewbacca: sobriety strikes back |
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Novelty names for special purpose vehicles in structured finance have all but disappeared thanks to Enron.
The vehicles for off-balance-sheet transactions used to be given humorous or creative names. They ranged from the animal (Panther) to the mythical (Ariadne) to the plain weird (Geldilux). But the outcry over Enron has put an end to that.
The special purpose entities at the heart of Enron were Chewco, after Chewbacca from Star Wars, and Raptors, after Jurassic Park. The bankers who named them were having a bit of fun but the joke fell flat when the SPEs were dissected by the Senate, SEC and the press. Now, the party is over.
“I used to get a real kick from giving some billion-dollar shell company a really silly and obscure name,” says one banker. “But now I keep the names really normal in case it should ever come before Congress. Those guys have no sense of humour.”
Many borrowers are suspicious of structured finance as they are fearful of being called the next Enron. This makes them even more wary of novelty SP names.
New issues from the US have instead gone for maximum transparency, for example: The National City Auto Receivables Trust 2002-2. But European originators are still having fun with euro transactions. Jazz CDO, Grecale SM and Spirit Funding have all recently launched.
