The Space Assets Protocol to the Cape Town Convention, which is soon to be adopted, will introduce thelegal framework for asset-based financing to be used by the commercial entities that are playing evermore important role in space activities. Although asset-based financing has not been popular as financingmethod in the space industry so far, this paper finds that the Protocol is likely to benefit the industry asthe mechanism to solve the problems of incomplete information arising in financial transactions. Therecent experiences of leveraged buy outs in satellite industry does not imply that the Protocol has limiteduse in this industry, as the economic studies indicate that the improvements of creditor's rights will nothinder, but rather facilitate, leveraged buy outs. The Space Assets Protocol will, indeed, be aninternational instrument suitable for the era of commercialisation of space activities.
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