Securitization and Special Purpose Vehicles in an International Setting: a Systemic View

The present work tries to display a comprehensive and comparative study of the different legal and regulatory problems involved in international securitization transactions. First, an introduction to securitization is provided, with the basic elements of the transaction, followed by the different varieties of it, including dynamic securitization and synthetic securitization structures. Together with this introduction to the intricacies of the structure, a insight into the influence of securitization in the financial and economic crisis of 2007-2009 is provided too; as well as an overview of the process of regulatory competition and cooperation that constitutes the framework for the international aspects of securitization. The next Chapter focuses on the aspects that constitute the foundations of structured finance: the inception of the vehicle, and the transfer of risks associated to the securitized assets, with particular emphasis on the validity of those elements, and how a securitization transaction could be threatened at its root. In this sense, special importance is given to the validity of the trust as an instrument of finance, to the assignment of future receivables or receivables in block, and to the importance of formalities for the validity of corporations, trusts, assignments, etc., and the interaction of such formalities contained in general corporate, trust and assignment law with those contemplated under specific securitization regulations. Then, the next Chapter (III) focuses on creditor protection aspects. As such, we provide some insights on the debate on the capital structure of the firm, and its inadequacy to assess the financial soundness problems inherent to securitization. Then, we proceed to analyze the importance of rules on creditor protection in the context of securitization. The corollary is in the rules in case of insolvency. In this sense, we divide the cases where a party involved in the transaction goes bankrupt, from those where the transaction itself collapses. Finally, we focus on the scenario where a substance over form analysis may compromise some of the elements of the structure (notably the limited liability of the sponsor, and/or the transfer of assets) by means of veil piercing, substantive consolidation, or recharacterization theories. Once these elements have been covered, the next Chapters focus on the regulatory aspects involved in the transaction. Chapter IV is more referred to “market” regulations, i.e. those concerned with information disclosure and other rules (appointment of the indenture trustee, and elaboration of a rating by a rating agency) concerning the offering of asset-backed securities to the public. Chapter V, on the other hand, focuses on “prudential” regulation of the entity entrusted with securitizing assets (the so-called Special Purpose vehicle), and other entities involved in the process. Regarding the SPV, a reference is made to licensing requirements, restriction of activities and governance structures to prevent abuses. Regarding the sponsor of the transaction, a focus is made on provisions on sound originating practices, and the servicing function. Finally, we study accounting and banking regulations, including the Basel I and Basel II Frameworks, which determine the consolidation of the SPV, and the de-recognition of the securitized asset from the originating company’s balance-sheet, as well as the posterior treatment of those assets, in particular by banks. Chapters VI-IX are concerned with liability matters. Chapter VI is an introduction to the different sources of liability. Chapter VII focuses on the liability by the SPV and its management for the information supplied to investors, the management of the asset pool, and the breach of loyalty (or fiduciary) duties. Chapter VIII rather refers to the liability of the originator as a result of such information and statements, but also as a result of inadequate and reckless originating or servicing practices. Chapter IX finally focuses on third parties entrusted with the soundness of the transaction towards the market, the so-called gatekeepers. In this respect, we make special emphasis on the liability of indenture trustees, underwriters and rating agencies. Chapters X and XI focus on the international aspects of securitization. Chapter X contains a conflicts of laws analysis of the different aspects of structured finance. In this respect, a study is made of the laws applicable to the vehicle, to the transfer of risks (either by assignment or by means of derivatives contracts), to liability issues; and a study is also made of the competent jurisdiction (and applicable law) in bankruptcy cases; as well as in cases where a substance-over-form is performed. Then, special attention is also devoted to the role of financial and securities regulations; as well as to their territorial limits, and extraterritoriality problems involved. Chapter XI supplements the prior Chapter, for it analyzes the limits to the States’ exercise of regulatory power by the personal and “market” freedoms included in the US Constitution or the EU Treaties. A reference is also made to the (still insufficient) rules from the WTO Framework, and their significance to the States’ recognition and regulation of securitization transactions.

Planning and flexible operation of storage systems in power grids: from transmission to distribution networks

The first part of the thesis has been devoted to the transmission planning with high penetration of renewable energy sources. Both stationary and transportable battery energy storage (BES, BEST) systems have been considered in the planning model, so to obtain the optimal set of BES, BEST and transmission lines that minimizes the total cost in a power network. First, a coordinated expansion planning model with fixed transportation cost for BEST devices has been presented; then, the model has been extended to a planning formulation with a distance-dependent transportation cost for the BEST units, and its tractability has been proved through a case study based on a 190-bus test system. The second part of this thesis is then devoted to the analysis of planning and management of renewable energy communities (RECs). Initially, the planning of photovoltaic and BES systems in a REC with an incentive-based remuneration scheme according to the Italian regulatory framework has been analysed, and two planning models, according to a single-stage, or a multi-stage approach, have been proposed in order to provide the optimal set of BES and PV systems allowing to achieve the minimum energy procurement cost in a given REC. Further, the second part of this thesis is devoted to the study of the day-ahead scheduling of resources in renewable energy communities, by considering two types of REC. The first one, which we will refer to as “cooperative community”, allows direct energy transactions between members of the REC; the second type of REC considered, which we shall refer to as “incentive-based”, does not allow direct transactions between members but includes economic revenues for the community shared energy, according to the Italian regulation framework. Moreover, dispatchable renewable energy generation has been considered by including producers equipped with biogas power plants in the community.

Analysis and improvements of four-wire power converters for electric vehicle chargers

A robust and well-distributed backbone charging network is the priority to ensure widespread electrification of road transport, providing a driving experience similar to that of internal combustion engine vehicles. International standards set multiple technical targets for on-board and off-board electric vehicle chargers; output voltage levels, harmonic emissions, and isolation requirements strongly influence the design of power converters. Additionally, smart-grid services such as vehicle-to-grid and vehicle-to-vehicle require the implementation of bi-directional stages that inevitably increase system complexity and component count. To face these design challenges, the present thesis provides a rigorous analysis of four-leg and split-capacitor three-phase four-wire active front-end topologies focusing on the harmonic description under different modulation techniques and conditions. The resulting analytical formulation paves the way for converter performance improvements while maintaining regulatory constraints and technical requirements under control. Specifically, split-capacitor inverter current ripple was characterized as providing closed-form formulations valid for every sub-case ranging from synchronous to interleaved PWM. Outcomes are the base for a novel variable switching PWM technique capable of mediating harmonic content limitation and switching loss reduction. A similar analysis is proposed for four-leg inverters with a broad range of continuous and discontinuous PWM modulations. The general superiority of discontinuous PWM modulation in reducing switching losses and limiting harmonic emission was demonstrated. Developments are realized through a parametric description of the neutral wire inductor. Finally, a novel class of integrated isolated converter topologies is proposed aiming at the neutral wire delivery without employing extra switching components rather than the one already available in typical three-phase inverter and dual-active-bridge back-to-back configurations. The fourth leg was integrated inside the dual-active-bridge input bridge providing relevant component count savings. A novel modified single-phase-shift modulation technique was developed to ensure a seamless transition between working conditions like voltage level and power factor. Several simulations and experiments validate the outcomes.