This thesis is designed to introduce securitization of IP rights as an alternative instrument in the corporate funding process. It is set up in a way that the corporate treasury, which has the responsibility for a diversified and economically optimized liability side and hence has a natural interest in new funding alternatives, can get an understanding for the instrument as such. Moreover, a treasurer shall be enabled to assess whether the balance sheet of his company comprises IP assets that have the potential to serve as collateral for a securitization. In case this asset identification process leads to positive results, the thesis additionally points out the crucial issues that have to be faced and analyzed before structuring this type of transaction. Although primarily focused on the corporate treasury’s needs, this thesis also gives other interested readers a holistic view of risks, benefits and economic impacts of an IP backed securitization. To fully understand the whole concept, perspectives need to be switched from time to time, e.g. to understand rating agencies’ or investors’ concerns which in turns lead to certain structuring issues for the originator. [...] This paper is structured in a way that allows readers to put themselves into the position of a corporate treasurer and to understand all associated issues of IP securitization in a target oriented order. Hence, before taking a closer look at IP and securitization in general, it is crucial to discuss the challenges in the corporate treasury’s daily work in section 2. As the respective asset class is the key to the understanding of its securitization, section 3 clarifies basics of IP and introduces its different forms. This is of special importance as IP is characterized by an extreme heterogeneity of the different asset types which makes one of the prime differences compared to traditional securitization. Section 4 analyzes how and to what extent securitization of IP can be and has been applied in practise so far. Existing transactions are used to derive the issues that earn most attention and decide over a transaction’s success. In that context, the knowledge of the market is an essential and indispensable source of information as most originators of IP backed transactions treat their deals highly confidential and research on available secondary literature shows poor results. Having set the scene, the following sections concentrate on the corporate treasurer’s perspective. [...]
Inhaltsverzeichnis (Table of Contents)
- INTRODUCTION
- CHALLENGES OF CORPORATE FUNDING
- INTRODUCTION TO INTELLECTUAL PROPERTY
- Definition and classification
- Different types of intellectual property
- Patents
- Trademarks
- Copyrights
- Other types of intellectual property
- Economic weight of intellectual property
- INTELLECTUAL PROPERTY: A NEW ASSET CLASS IN SECURITIZATION?
- Securitization
- the tool in brief
- Definition of IP in the securitization arena
- Market overview
- Benefits and hindrances of IP securitization
- Corporates
- Investors
- Banks
- Hindrances of market growth
- Funding conditions
- Case Study: BioPharma Royalty Trust
- Securitization
- IDENTIFICATION OF SECURITIZABLE INTELLECTUAL PROPERTY
- MAJOR ISSUES IN THE STRUCTURING PROCESS
- Transaction structure
- Introductory remarks
- Direct IP securitization
- IP true sale structure
- IP sale and lease-back structures
- Indirect IP securitization
- Basic IP royalties structure
- Conditional assignment structure
- Secured IP loan structure
- Servicing
- Credit enhancement
- Introductory remarks
- Internal credit enhancement tools
- External credit enhancement tools
- Transaction structure
- EXECUTION OF AN IP BACKED SECURITIZATION
- Introductory remarks
- Transaction preparation
- Documentation
- Rating Process
- Marketing and distribution
- Other borrower obligations
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This master thesis aims to assess the viability of securitizing intellectual property (IP) as an alternative funding source for corporations. The thesis delves into the challenges of traditional corporate funding and explores the potential of IP securitization in addressing these challenges.
- The role of intellectual property in the contemporary economic landscape
- The mechanics and feasibility of securitizing intellectual property
- The potential benefits and drawbacks of IP securitization for corporations, investors, and banks
- The structuring and execution of IP-backed securitizations
- Case studies and real-world examples of IP securitization
Zusammenfassung der Kapitel (Chapter Summaries)
The thesis begins by examining the challenges faced by corporations in securing funding through traditional means. It then introduces the concept of intellectual property and its growing importance in the global economy. Chapter 4 delves into the potential of IP securitization, exploring its definition, market overview, and the benefits and hindrances associated with this innovative funding approach. The thesis also discusses the factors that influence the feasibility and attractiveness of IP securitization, analyzing the perspectives of various stakeholders involved. Chapter 5 focuses on identifying the types of intellectual property that are most suitable for securitization, highlighting key considerations and criteria for evaluating their suitability. The thesis concludes by exploring the intricacies of structuring and executing IP-backed securitizations, covering aspects such as transaction structure, credit enhancement, and the various stages involved in the process.
Schlüsselwörter (Keywords)
The core keywords and focus topics of the thesis revolve around intellectual property, securitization, corporate finance, alternative funding, asset-backed securities, and market dynamics. The thesis investigates the emerging potential of securitizing intellectual property as a funding alternative for corporations, examining its feasibility, benefits, and challenges in a comprehensive manner. The discussion encompasses crucial aspects such as structuring, credit enhancement, and the role of various stakeholders in the IP securitization process.
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- Alexander Kirsch (Autor), 2005, Securitization of Intellectual Property as a Funding Alternative, Múnich, GRIN Verlag, https://www.grin.com/document/38915
