§ 53-425. Definitions.
Article 25.
Asset‑BackedSecurities Facilitation.
§ 53‑425. Definitions.
The following definitionsapply in this Article:
(1) Beneficial interest. Debt or equity interests or obligations of any type that are issued by aspecial purpose entity and entitle the holder of the interest or obligation toreceive payments that depend primarily on the cash flow from financial assetsowned by the special purpose entity.
(2) Financial asset. Cash or a contract or instrument that conveys to an entity a contractual rightto receive cash or another financial instrument from another entity.
(3) Securitization. The issuance by a special purpose entity of evidences of beneficial interestthat meets one of the following criteria:
a. Its most seniorclass at the time of issuance is rated in one of the four highest categoriesassigned to long‑term debt or in an equivalent short‑term category(within either of which there may be sub‑categories or graduationsindicating relative standing) by one or more nationally recognized ratingorganizations.
b. It is sold intransactions by an issuer not involving any public offering under section 4 ofthe Securities Act of 1933 (15 U.S.C. 77d), as amended, or in transactionsexempt from registration under the Securities Act of 1933 pursuant toRegulation S issued in accordance with the Act, or any successor regulationsissued under the Act.
(4) Special purposeentity. A trust, corporation, limited liability company, or other entitydemonstrably distinct from the transferor that is primarily engaged inacquiring and holding (or transferring to another special purpose entity)financial assets, and in activities related or incidental thereto, inconnection with the issuance by the special purpose entity (or by anotherspecial purpose entity that acquires financial assets directly or indirectlyfrom the special purpose entity) of evidences of beneficial interests.
(5) Transferor. Afinancial institution insured by the Federal Deposit Insurance Corporation. (2002‑88, s. 1; 2002‑159,s. 33.)