Securitisation and Structured Finance: an Overview

Boston Brussels Chicago Düsseldorf Houston London Los Angeles Miami Munich New York Orange County Rome San Diego Silicon Valley Washington, D.C.

Strategic alliance with MWE China Law Offices (Shanghai)

www.mwe.com

Securitisation and Structured Finance: an Overview

1 The Firm

2 SeCUriTiSATiON AND STrUCTUreD FiNANCe

4 OTher relevANT prACTiCe grOUpS

As a leading international law firm (among the top 20 globally), McDermott Will & Emery provides a comprehensive range of legal services to a broad spectrum of corporate, institutional, governmental and private clients. With 1,100 lawyers and 15 offices worldwide, McDermott Will & Emery has the experience and resources necessary to meet the full scope of clients’ needs in the United Kingdom, the United States and beyond. We are committed to working with our clients and their other advisors as a team to provide efficient, consistent, high-quality service combined with an innovative approach.

Our ApproachOur Firm fosters long-term relationships with clients based on a high level of partner involvement. We make it a priority to fully understand our clients’ operations and objectives, their systems and their requirements. We believe that an intimate knowledge of our clients’ businesses and a dedicated, flexible approach to client relationships are indispensable in ensuring the consistent high quality of our services. We reflect our clients’ desire for value and recognise their need to account for and, where possible, minimise costs.

Client SatisfactionMcDermott Will & Emery was ranked eighth out of 240 firms in the BTI Consulting Group’s annual independent survey, The Survey of Client Service Performance for Law Firms. We were also one of only six law firms to be designated as “client service standouts”—a designation for those law firms that have been in the top 30 for client service in each of the past four years. Survey responses came from 200 corporate counsel at Fortune 1000 and other large US-based companies.

The London OfficeIn addition to our offices in the United States, we have a strong UK and continental European presence and an excellent network of contacts internationally, which allows us to supply comprehensive, multi-jurisdictional service even where we do not have local offices.

Our presence in London reflects our commitment to serving our clients’ international and domestic UK and US legal needs. We see our London office as a platform from which to further our reputation for provision of superior client service.

Our London office’s practice encompasses mergers and acquisitions, corporate finance, banking and capital markets, energy, competition, financial services, securitisation and structured finance, US securities, UK and international taxation, UK and international commercial law, employment, pensions, dispute resolution, telecommunications, information technology/intellectual property, marketing and e-business.

Our London lawyers are reputed for excellence in their respective areas and dedication to client service. Most of our partners are recognised as leaders in their respective fields by Chambers Guide to the Legal Profession, a leading United Kingdom authority on commercial legal practices. They are also recognised in other leading directories, such as Legal 500 and Legal Experts.

The

Fir

m

1

Advising on securitisation and structured finance matters requires an in-depth understanding of the financial markets, the individuals who operate within them, and the products and services available.

Our Securitisation and Structured Finance Practice Group consists of highly skilled lawyers who advise on the full range of securitisation and structured finance techniques. We provide a comprehensive and multi-jurisdictional capability, working seamlessly across the European/US axis to provide you with cutting-edge advice. Our securitisation and structured finance lawyers bring a unique commercial perspective to their practices, as many have either worked in the commercial banking or regulatory sectors prior to joining McDermott or have gained insight into the financial markets through secondments with leading international investment banks. As a result, we understand our clients’ commercial needs to go to market quickly with innovative products, and how to structure those products.

Our in-depth knowledge is supported by our global banking and finance, tax, capital markets, corporate, derivatives and regulatory groups, which provide extensive advice on all issues as they relate to securitisation and structured finance.

SeCUriTiSATiONOur securitisation practice has experience in complex international securitisations and structures across multiple jurisdictions. We represent commercial banks, investment banks, originators, investment companies and advisors, and insurance companies.

Our lawyers have been involved in securitisation and structured finance transactions over the last three years with a collective value of more than US$50 billion. We have advised clients on a wide variety of transactions, and our experience includes structuring many types of securitisation platforms, including structured investment vehicles (SIVs), arbitrage ABCP conduits, multi-seller ABCP conduits, repo-conduits, and both term and synthetic structures.

Secu

ritis

atio

n an

d St

ruct

ured

Fin

ance

2

“We provide a comprehensive and multi-jurisdictional capability, working seamlessly across the European/US axis to provide you with cutting-edge advice.”

3

STrUCTUreD FiNANCeOur lawyers have extensive derivative and structured finance experience working on a wide range of cash and synthetic structured credit transactions, funds and derivatives.

Our structured product knowledge is supported by our international Hedge Funds Practice Group, which advises on a range of fund related issues, including hedge fund structuring and formation, due diligence, operations advice, and documentation and agreements.

We also advise on all aspects of securitisation through both term and ABCP structures for all classes of assets in numerous jurisdictions, including the United Kingdom, the United States, Portugal, Italy, the Netherlands, Belgium, Denmark, France, Germany, Russia and Kazakhstan. Asset classes we have advised on include

• Consumer loans • Credit cards

• Automobile loans and leases • Aircraft leases

• Equipment loans and leases • Franchise loans

• Trade receivables • Insurance premiums

• Residential mortgages • Life insurance

• Commercial mortgages • Health care receivables

Our clients include investment banks, insurance companies, consumer finance companies, hedge funds, energy companies, investment managers and pension funds. Our team has particular experience in advising on

• Resettable equity option agreements with a leveraged exposure to hedge funds

• Hedge fund leveraged synthetic investment in other hedge funds

• Collateralised Fund Obligations (CFOs) of hedge funds and private equity funds

• Leveraged total return swaps

• Credit default swaps

• Principal-protected and capital guarantee notes with a hedge fund performance-linked component

• Collateralised Bond Obligations (CBOs) and Collateralised Loan Obligations (CLOs), both cash and synthetic structures as well as hybrids

• Retail structured products

4

Our Securitisation and Structured Finance Practice Group works closely with lawyers in other practice areas to produce seamless and timely advice to our transactional clients.

CorporateOur corporate practice represents a wide spectrum of business interests around the world, from Global 50 companies to venture backed start-ups, as well as the financial institutions that support them. We are highly skilled business lawyers focused on solving complex business problems. We act as strategic partners in the execution of our clients’ capital raising and corporate development plans.

Derivatives, Structured Finance & Financial ProductsOur Derivatives, Structured Finance & Financial Products Practice Group covers the full range of legal representation related to derivatives, including dealer and end user tax, regulatory planning and defence, transactional work, documentation and insolvency issues, legislative and regulatory advocacy, and controversy resolution. Our experience covers all of the significant derivative markets: interest rate, equity, credit, currency, commodity, energy and weather. Our clients include commercial and investment banks, energy companies, corporate end users, pension funds, insurance companies, brokerage firms, electronic exchanges and trading networks, clearing organisations, cooperatives and agribusinesses, hedge funds, trading firms, individual investors and family offices.

Finance & BankingOur Finance & Banking Practice Group represents international commercial banks, institutional investors, investment banks, investment funds, corporate and special purpose borrowers, and other financial institutions. We advise on numerous types of transactions and financial products, including private placements, leveraged and asset-based financings, syndicated and bilateral lending, project financings, cross-border financings, leveraged leasing, credit-enhanced financings, derivatives transactions, commercial banking and securitisations.

Hedge FundsOur Hedge Funds Practice Group is a multi-disciplinary team providing comprehensive advice to start-up and established hedge fund managers, advisors and financial institutions that engage in business with hedge funds. We draw on our highly skilled lawyers in the United States, the United Kingdom, Belgium, Germany and Italy to provide our clients with seamless service across the markets in which they operate.

SecuritiesOur Securities Practice Group has extensive experience in the representation of issuers and underwriters in the full range of capital market transactions around the world. Our transactions range from small unregistered private placements to multibillion dollar underwritten public offerings. We advise public companies and their insiders on public reporting requirements, shareholder matters and listing requirements of the world’s major stock exchanges.

Tax Our Tax Practice Group, one of the largest law firm tax practices in the world, advises on all tax-related areas. In International Tax Review’s first-ever global tax services survey, McDermott received a best-brand mention in the United States.

Tax lawyers in our Capital Markets Tax Practice Group have represented both US and non-US issuers and underwriters with respect to the tax consequences of US and international offerings of debt and equity securities. Such transactions include public and private offerings of investment-grade and high-yield debt (including related exchange offers), common stock, preferred stock (including tracking stock) and hybrid securities, including TOPrS, MIPs, QUIPS, QUIDs, QUICs, “enhanced” TOPrS, MAPs, REPs Bonds, ACES, Feline Prides, PHONES and ZENS. In addition our lawyers have represented US and non-US issuers of asset-backed securities including REMICs; REITs; and real estate, music royalty and entertainment royalty securitisation vehicles.

Oth

er R

elev

ant P

ract

ice

Gro

ups

Fax: +44 20 7577 6950

Steven Black–Partner

[email protected]: +44 20 7575 0370

aBeSh choudhury–Partner

Joining 1 July 2008

kate Patané–counSel


nick terraS–co-head & Partner


Peter humPhreyS–Partner


david mathuS–Partner


michael Pettingill–Partner


kurt alfrey–counSel


Pierre Brochet–Partner


kate lamBurn–Partner


Paul-michael reBuS–co-head & Partner


BoB anSehl–Partner


John lutz–Partner


thomaS a. mcgavin–head & Partner


david l. tauB–Partner


London Principal Contacts

US Principal Contacts

• Advised a German bank in connection with structuring and documenting the purchase of a US$533 million portfolio of interests in US auto receivables by a multi-seller ABCP conduit

• Advised a German bank in connection with structuring and documenting the purchase of a £236 million portfolio of interests in UK auto receivables by a multi-seller ABCP conduit

• Advised a German bank in connection with structuring and documenting the purchase of a EUR400 million portfolio of interests in Japanese auto receivables by a multi-seller ABCP conduit

• Advised a German bank in connection with structuring and documenting the purchase of a £300 million portfolio of interests in UK residential mortgages by a multi-seller ABCP conduit

• Advised a Belgian bank in connection with structuring and documenting the purchase of a EUR70 million portfolio of UK trade receivables by a multi-seller ABCP conduit

• Advised a Belgian bank in connection with structuring and documenting the first European synthetic securitisation of a EUR500 million portfolio of trade receivables in Belgium and The Netherlands

• Advised a Brazilian bank in relation to a US$3.2 billion oil project; the transaction was the largest ever limited recourse project financing in Brazil

• Advised a Belgian bank in relation to its synthetic securitisation of a EUR1.6 billion portfolio of Dutch Residential Mortgages

• Advised a German bank in setting up and structuring a EUR10 billion European/US multi-seller, ABCP conduit

• Advised a German bank in connection with setting up and structuring a EUR5 billion European multi-seller, ABCP conduit

• Advised a US investment bank in its capacity as security trustee and issuing and paying agent in connection with the set-up of a EUR5 billion European ABCP conduit

• Advised a UK bank in connection with structuring and documenting the purchase of £21 million of UK insurance premium receivables by a multi-seller, ABCP conduit

• Advised a Belgian bank in connection with the restructuring of a US$25 billion European/US multi-seller, ABCP conduit

• Advised a Belgian bank in connection with setting up and structuring a US$5 billion US multi-seller, ABCP conduit

• Advised a UK bank in connection with setting up and structuring a US$8 billion European/US multi-seller, ABCP conduit

• Advised a German bank in connection with setting up and structuring a EUR3.5 billion European/US multi-seller, ABCP conduit

• Advised a German bank in connection with structuring and documenting the purchase of £300 million of interests in UK residential mortgages by a multi-seller, ABCP conduit

• Advised a UK bank in connection with restructuring a £10 billion European multi-seller, ABCP conduit

• Advised a Belgian bank in connection with the purchase of US$300 million of credit card receivables

• Advised a German bank in connection with structuring and documenting the purchase of £300 million of interests in UK residential mortgages by a multi-seller, ABCP conduit

• Advised a major German financial institution as arranger in connection with the securitisation of approximately EUR118 million of lease receivables originated by two Italian financial institutions, certain of the securities of which are listed on the Luxembourg Stock Exchange

Our Securitisation E

xperienceOur securitisation and structured finance team have acted as counsel to arrangers, originators, monoline insurers, underwriters, issuers and rating agencies in many term and conduit securitisation transactions in Europe.

term SecuritiSation tranSactionSThe following are some of the term transactions for which our lawyers have recently been involved in structuring and documenting:

• Advised Lloyds TSB Bank plc on the unique and highly structured combination of synthetic and cash securitisation of a US$6 billion portfolio of small and medium-sized enterprises; the transaction had direct investors in the credit default swap and investors in credit linked notes whose return is linked to the exposure under certain rated, tiered credit default swaps; the portfolio includes almost a million SME loans, is partially cash and partially synthetic, and has multi-tiered rated credit default swaps

• Advised Citigroup Capital Markets Limited on a EUR400 million Collateralised Loan Obligation (CLO) with significant credit enhancement features; the manager for the underlying portfolio is Pemba Credit Advisers, a subsidiary of Man Group plc and the Collateral Administrator is ABN AMRO Bank N.V. (London Branch)

• Advised BNP Paribas in its capacity as lead arranger in a multi-currency Collateralised Debt Obligation (CDO) of leveraged loans for Pemba Credit Advisers

• Advised Threadneedle Asset Management in its capacity as asset manager on a EUR500 million synthetic CDO

• Advised Lloyds TSB Bank plc in the approximately US$500 million synthetic securitisation of a first to default basket of sovereign credits from emerging markets jurisdictions

• Advised Threadneedle Asset Management in its capacity as asset manager on a EUR400 million synthetic CDO

• Advised Avendis Financial Services on restructuring of a EUR600 million Structured Investment Vehicle (SIV) including some uniquely complicated regulatory and tax issues, given the complex corporate group structures

• Advised Challenger on its junior investment in UK commercial mortgage backed securities (CMBS); the transaction was unique for certain Australian regulatory reasons

• Advised a French bank on a EUR800 million synthetic securitisation of Italian leases and loans; the transaction was one of the first Italian synthetic securitisations of leases through a rated conduit structure

• Advised on the junior investment in a securitisation of UK CMBSs, with a transaction size of approximately £25 million; because of certain Australian regulatory reasons, the transaction was highly structured, and was the client’s first investment in UK commercial mortgages through a CMBS

• Advised the originator as transaction counsel on the first securitisation of approximately EUR300 million worth of consumer receivables in Russia for Home Credit and Finance Bank

• Advised a German bank as the arranger on the securitisation of approximately EUR250 million of consumer loan receivables for Russian Standard Bank; the securitisation was Russia’s first “true sale” securitisation of consumer loan receivables

• Advised a Dutch bank as arranger on the securitisation of approximately EUR150 million of residential mortgages for the consumer lending subsidiary of a Kazakhstan bank; the securitisation was Kazakhstan’s first “true sale” securitisation of residential mortgages

• Advised the originator as transaction counsel on the first securitisation of approximately EUR150 million worth of residential mortgages in Russia; the securitisation was Russia’s first “true sale” securitisation of residential mortgages for a public bank

• Advised the originator, a large international corporate aircraft service and part provider, in connection with structuring and documenting the securitisation of approximately EUR600 million of receivables in the United Kingdom, France, Germany and Switzerland

• Advised the originator, a large international luxury German car manufacturer, in connection with structuring and documenting the securitisation of approximately EUR800 million of auto loans and leases in the United Kingdom, France, Germany, Spain, Belgium and the Netherlands

• Advised a German bank as arranger in connection with structuring and documenting the securitisation of approximately EUR250 million portfolio of interests in personal loans and credit cards originated by a financial institution in the Czech Republic

• Advised a German bank as arranger in connection with structuring and documenting the securitisation of approximately £67 million portfolio of interests in UK residential mortgages through the Redstone Mortgages plc platform

aSSet-Backed commercial PaPer conduit tranSactionSOur London securitisation lawyers have been involved in asset-backed and commercial paper (ABCP) transactions throughout the world with an aggregate transaction value exceeding US$100 billion.

The following represent a sample of some of the ABCP conduits and SIVs that our London securitisation lawyers have structured/re-structured:

• Golden Key • Rheingold Securitisation

• WhistleJacket • Salome Funding

• Salome Funding (Irish) • Pennine Funding

• Scaldis Capital • Matchpoint Finance

• Grampian Funding • Atomium Funding

• Silver Tower Funding • Quasar Funding

• Compass Securitisation • Check Point Charlie

• Cancara Asset Securitisation • Giro Lion Funding

• Arabella Funding

The following are some of the ABCP securitisation transactions on which our London securitisation lawyers have acted:

• Advised a Belgian bank in the restructuring of a US$5 billion hybrid ABCP programme; the programme was unique in that it made use of new derivatives technology to allow significantly more flexibility in order to contend with significant market disruptions

• Advised a Belgian bank in the EUR300 million securitisation of consumer loans, credit contracts, LTR contracts and consumer lease contracts; the securitisation was funded through a Portuguese Fund structure, then through a Belgian loan and ultimately through the issuance of ABCP; the transaction was unique in that it securitised various forms of consumer loans and leases, and also because funding parameters led to a significantly complicated tax and swap structure

• Advised an Italian bank on the securitisation of approximately EUR300 million of Italian equipment receivables through the issuance of ABCP; the transaction required significant structuring to avoid Italian withholding tax

• Advised an Italian bank in the securitisation of approximately EUR300 million of German ground leases funded through the issuance of ABCP

• Advised an Italian bank in the securitisation of approximately EUR350 million of Russian auto receivables for Russian Standard Bank funded through the issuance of ABCP; the transaction was unique in that it involved an emerging market asset funded despite significant market disruptions

• Advised an Italian bank in the securitisation of approximately EUR250 million of Russian residential mortgages for URSA Mortgage Finance funded through the issuance of ABCP

• Advised an Italian bank in the securitisation of approximately EUR400 million of Dutch, UK, French and German commercial mortgages funded through the issuance of ABCP; the transaction presented multiple withholding tax issues arising out of the fact that the funding vehicle was a Jersey SPV

• Advised an Italian bank in the securitisation of approximately £400 million of UK residential mortgages funded through the issuance of ABCP; the securitisation was part of a highly structured mortgage platform that makes use of both term and ABCP funding

• Advised BNP Paribas in the restructuring of a US$5 billion ABCP programme to facilitate non-match funded ABCP; the structure is unique in that it was restructured to contend with significant market disruptions

• Advised the originator on the securitisation of approximately EUR300 million worth of Russian consumer receivables through a multi-seller ABCP conduit

• Advised a German bank on the securitisation of approximately EUR250 million of Russian consumer loan receivables through a multi-seller ABCP conduit

• Advised a Dutch bank on the securitisation of approximately EUR150 million of Kazakstan residential mortgages through a multi-seller ABCP conduit; this was Kazakhstan’s first “true sale” securitisation of residential mortgages

• Advised a German bank in connection with structuring and documenting the securitisation of EUR200 million of interests in Italian equipment receivables through a multi-seller ABCP conduit

• Advised a Belgian bank in connection with structuring and documenting the securitisation of EUR200 million of Irish consumer loan receivables through a multi-seller ABCP conduit

• Advised a Belgian bank in connection with structuring and documenting the securitisation of EUR150 million of Czech Republic personal loans and credit card receivables through a multi-seller ABCP conduit

• Advised a Belgian bank in connection with structuring and documenting the securitisation of EUR150 million of Portuguese hospital receivables through a multi-seller ABCP conduit

• Advised a Nordic bank in connection with the establishment of a new credit arbitrage programme to invest in a portfolio of ABS and fund via an ABCP conduit; the structure was geared towards off-balance sheet treatment and Basel II optimisation

• Advised a Belgian bank in connection with structuring and documenting the purchase of a US$120 million portfolio of US trade receivables by a multi-seller ABCP conduit

• Advised a Belgian bank in connection with structuring and documenting the purchase of a US$500 million portfolio of revolving US credit card receivables by a multi-seller ABCP conduit

• Advised a German bank in connection with structuring and documenting the purchase of EUR129 million of interests in Czech Republic personal loans and credit card receivables by a multi-seller ABCP conduit

• Advised a UK bank in connection with structuring and documenting the purchase of a £21 million portfolio of UK insurance premium receivables by a multi-seller ABCP conduit

• Advised a German bank in connection with structuring and documenting the purchase of a £100 million portfolio of interests in UK residential mortgages by a multi-seller ABCP conduit

• Advised a German bank in connection with structuring and documenting the purchase of a £250 million portfolio of interests in UK commercial mortgages by a multi-seller ABCP conduit

• Advised a UK bank in connection with structuring and documenting the purchase of a £60 million portfolio of UK insurance premium receivables by a multi-seller ABCP conduit

• Advised a Belgian bank in connection with structuring and documenting the purchase of a US$510 million portfolio of interests in US residential mortgages by a multi-seller ABCP conduit

© 2008 McDermott Will & Emery. The following legal entities are collectively referred to as "McDermott Will & Emery," "McDermott" or "the Firm": McDermott Will & Emery LLP, McDermott Will & Emery/Stanbrook LLP, McDermott Will & Emery Rechtsanwälte Steuerberater LLP, MWE Steuerberatungsgesellschaft mbH, McDermott Will & Emery Studio Legale Associato and McDermott Will & Emery UK LLP. McDermott Will & Emery has a strategic alliance with MWE China Law Offices, a separate law firm. These entities coordinate their activities through service agreements. This communication may be considered attorney advertising. Previous results are not a guarantee of future outcome.

Date post:	03-Feb-2022
Category:	Documents
Upload:	others
View:	2 times
Download:	0 times

Securitisation and Structured Finance: an Overview

Documents