Securitization for Project Capital

Overview

OVO’s Securitized Project Capital framework redefines how large-scale developments are financed. By combining institutional securitization principles with U.S. Treasury credit enhancement, blockchain-enabled execution, and tokenized issuance, OVO delivers an innovative yet institutional-grade financing architecture.

This framework enables sponsors to secure non-recourse project funding with transparency, regulatory discipline, and execution certainty—without reliance on conventional bank balance sheets or dilutive capital sources.

Non-Recourse Structure

Traditional project financing—construction loans, bank facilities, leasebacks, private equity, or government programs—is often slow, complex, and dilutive. OVO replaces these models with a self-amortising, non-recourse securitization framework, enabling sponsors to remain focused on delivery and execution.

At the core of this framework is a trustee-managed sinking fund, funded directly from gross issuance proceeds and governed by institutional post-issuance servicing standards.

Key components include:

Sinking Funds

Funded from gross issuance proceeds and managed by an independent securities trustee. These funds service coupon or dividend obligations and are structured to retire the note in full over time.

Non-Recourse Financing

Repayment is isolated to the securitization structure itself, eliminating recourse to the sponsor’s balance sheet.

U.S. Treasury Credit Enhancement

Acts as a contingent default backstop, reinforcing investor protection in the event sinking-fund performance underperforms defined thresholds.

This structure protects investor capital while preserving sponsor autonomy and limiting liability.

Securitization Framework

Securitization transforms liquid and illiquid assets into tradeable securities through a Special Purpose Vehicle (SPV). Assets are transferred into the SPV and serve as collateral for the issuance of asset-backed instruments.

OVO structures securitizations across a broad range of asset classes, including:

• Publicly traded securities and portfolios
• Loans, leases, and receivables
• Real estate and infrastructure assets
• Tangible and alternative assets
• Contractual claims, royalties, and option rights

This approach enables efficient capital formation, expands institutional access to non-traditional assets, and delivers liquidity without burdening bank balance sheets.

Special Purpose Vehicle (SPV)

Each issuance is executed through an OVO-sponsored SPV, established exclusively for securitization and structured to institutional standards.

The SPV provides:

• Ring-fenced assets and liabilities
• Transaction-level limited liability
• Structural isolation between issuances
• Flexibility to support multiple securitizations without cross-contamination

This architecture ensures legal clarity, creditor protection, and execution integrity.

Industry Fundamentals

At its foundation, securitization pools assets or rights into a reference collateral portfolio, which may be homogeneous or diversified. Common collateral categories include:

• Bond and equity portfolios
• Real estate developments
• Vehicle loans and leases
• Residential and commercial mortgages
• Credit card receivables, student loans, aircraft leases
• Brand and franchise royalties

This framework ensures disciplined capital accumulation, strict compliance with payment waterfalls, and timely retirement of obligations.

Global Securitization Market

Securitization remains a cornerstone of institutional finance. In 2024, the global securitization market exceeded $13 trillion, with approximately $1 trillion issued in the United States alone.

Industry bodies such as the Association for Financial Markets in Europe (AFME) continue to support securitization as a critical mechanism for capital formation, balance-sheet efficiency, and economic growth.

Preferred & Perpetual Participating Structures

For development capital, preferred perpetual participating instruments are often optimal. Unlike traditional bonds, these structures do not require a fixed maturity date.

Key features include:

• Annual dividends or coupons
• Performance participation when defined thresholds are exceeded
• Trustee-managed sinking funds that accumulate reserves and retire par value over time
• Fully non-recourse repayment mechanics

This structure aligns investor returns with project performance while maintaining institutional-grade capital protection.

Cash Flow Waterfall & Sinking Funds

All issuances operate under a clearly defined cash-flow waterfall, detailed within the PPM or prospectus.

Proceeds are segregated into:

• Securitization servicers
• Multiple classes of sinking funds
• Net proceeds allocated to project buildout

Sinking funds are structured to:

• Pay dividends or coupons
• Accumulate reserves for mandatory calls
• Retire obligations progressively

The result is a self-funding capital structure that enhances predictability, transparency, and investor confidence.

Blockchain & Tokenization

OVO integrates blockchain infrastructure to modernize securitization execution while preserving institutional discipline.

Key benefits include:

• Blockchain-enabled delivery-versus-payment (DvP) settlement
• Immutable, auditable transaction records
• Automated waterfall distributions via smart contracts
• On-chain incorporation of core documents (PPM, term sheets, reliance letters)

U.S. Treasury collateral remains off-chain and institutionally custodied, serving as a robust credit backstop to the digital issuance while preserving the non-recourse structure.

Conclusion

OVO’s securitized project capital platform integrates non-recourse structuring, U.S. Treasury credit enhancement, trustee-managed sinking funds, and blockchain-enabled execution into a single institutional-grade solution.

The result is a resilient, transparent, and scalable financing framework designed for landmark, capital-intensive developments at institutional scale.

Key Benefits

• Scalable execution across diverse development assets
• Reduced reliance on custodians, broker-dealers, and clearing systems
• Non-recourse project funding without balance-sheet dilution
• Accelerated execution through tokenized issuance and DvP settlement
• Regulatory discipline aligned with institutional market standards

Engage us to explore how securitized project financing can support your next landmark development.