Importance

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Abstract

Systems and methods for the issuance of low-risk debt securities, referred to as LITE Securities, in exchange for high-risk debt securities which have been issued by an emerging-market sovereign government in the global capital market and which have been purchased by an investor which resides in the sovereign government's country. Investment in LITE Securities result in little or no loss of market liquidity for the investor compared to the market liquidity of the original high-risk debt securities despite the LITE Securities itself being less liquid. The systems and methods for the servicing of the LITE Securities are convenient for the issuer as no new debt securities will need to be serviced. The systems and methods disclosed also allow resident institutional investors such as banks to more efficiently use regulatory capital against debt issued by its own sovereign, as prescribed by the international bank capital standards known as the Basel Accord.

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First Claim