K&L Gates’ global capital markets and asset securitization practice group assists clients in cross-border, U.S. and U.K.-centered mortgage and asset-backed securitizations; asset repackagings and structured derivative products; warehouse lending and conduit programs for loan originators and servicers; initial offerings and secondary market activities involving investment-grade and junk bonds; mortgages and other loans and associated servicing rights; municipal bond secondary activities; public and private debt registered public offerings of debt and equity securities, including IPOs and secondary offerings of equity securities for U.S. domestic and foreign issuers and other international equity offerings, including Regulation S and Rule 144A placements of debt and equity securities; U.S. offerings or placements of ADRs and ADSs for foreign issuers; PIPE transactions; and project finance.  The firm’s clients benefit from full-service offices in many key financial and regulatory centers, including New York, London, Washington, D.C., Boston, Pittsburgh, Los Angeles, San Francisco, Seattle, Orange County, Hong Kong, Taipei, Beijing, Miami and Dallas.  This is a multidisciplinary practice area drawing on lawyers from the following fields: securities and commodities regulation, tax, insolvency, and investment company and pension plan regulation.

The group represents financial institutions, broker-dealers, securitization sponsors and servicers and loan trading firms.

For information about K&L Gates’ Global Capital Markets transactions, please see Representative Matters.

Asset Securitization
K&L Gates has been recognized by the leading publications in the field as one of the leading firms in U.S.-based and cross-border asset securitization.  Our securitization clients include originators, issuers, underwriters and investment managers.  The firm’s primary focus has been in mortgages, trade receivables and municipal financial assets.  We have also been involved in structuring several large collateralized bond obligations and collateralized fund obligations; international securitizations (including securitizations based on “future flows”); and asset-backed offerings involving secured and unsecured consumer loans (auto loans, commodities-backed loans and others); repackaging investment grade debt and sub- and non-performing financial assets; and credit card merchant voucher payment rights.  K&L Gates expects to complete the 2006 calendar year with issuer and underwriter assignments on transactions totaling more than $2 billion of asset-backed securities.

In the collateralized bond obligation and collateralized fund obligation areas, we have principally represented affiliates of major mutual fund families in their capacities as investment manager/collateral manager and issuer.  In the tax lien securitization area, lawyers in our asset securitization group not only represented the issuer in the very first tax lien securitization, but have also acted as counsel to the underwriters in the New York City tax lien securitization program since its inception in 1996.  The firm has also performed advisory work for sponsor/originators of collateralized loan obligations and collateralized fund obligations.  Our residential and commercial mortgage-backed securities practice focuses primarily on issuer’s counsel for subprime residential mortgages and small balance commercial mortgage loans for some of the largest originators in both single-seller and multi-seller transactions.  In the consumer area, the group’s lawyers have worked on several secured consumer receivables securitizations, including auto loans and commodities margin loans.  In addition, members of our asset securitization group have worked on various types of transactions which utilize securitization structures to provide more cost-effective warehouse funding to originators of performing mortgage assets and to owners of nonperforming mortgage assets.  We recently structured a securitization transaction that enabled the Development Finance Corporation of Belize to sell its mortgage assets by accessing the U.S. capital markets.  In all facets of our securitization practice involving mortgage and consumer financial assets, the lawyers in our asset securitization group rely heavily on the experience of our Mortgage Banking and Consumer Finance Group for the analysis of related legal and regulatory issues.

In addition, members of our asset securitization group have worked on numerous cross-border securitizations and structured financings, often in Latin America.  We have structured securitizations involving export receivables for industrial companies, including transactions benefiting from credit support backed by financial guaranty insurance and performance bonds.  We also have structured securitizations involving credit card merchant voucher receivables for financial institutions located in the region. 

For Asset Securitization representative matters, click here.

Commodity Finance
K&L Gates has extensive experience in the U.S. and Latin America in the specialized area of commodity financing.  In fact, one of our partners spent several years as the in-house counsel responsible for the commodity finance group in the home office of one of the world’s largest financial institutions.  We have represented companies which take positions in the world’s hard and soft commodities markets, such as oil, natural gas and other petroleum products, ferrous and non-ferrous metals and agribusiness, and regularly represent a number of international financial institutions which regularly provide credit products and other financial accommodations to such companies.  We also have represented large industrial companies based in Latin America in structured financings backed by their export receivables flows, in structured import note finance programs, and in structured commodity finance transactions.  K&L Gates has also been involved in several securitizations for one of the countries’ largest margin lenders for customers wishing to take positions in commodities. 

The work we do in commodity finance is largely transactional in nature, performed in connection with syndicated agented working capital credit facilities; single and multi-lender asset-based loans; large single and multiple cargo financings; import and export trade finance transactions; and more complex structures such as asset securitizations and tax-advantaged leasing transactions involving issuers or lessees in the commodities businesses.  We have particular expertise in respect of issues relating to secured financing of commodities, such as security interests in documents of title like bills of lading and warehouse receipts and in inventory in transit.

Derivatives, Structured Products and Futures
K&L Gates regularly advises a variety of hedge funds, mutual funds, corporations, foundations, municipalities, individuals, and other end users in structuring, negotiating and documenting a full range of over-the-counter (OTC) derivatives, including credit, equity, interest rate, currency, energy and other commodity derivatives.  Our deep experience in negotiating and documenting ISDA agreements enables us to achieve exceptional efficiencies in representing clients on ISDA matters, consequently providing our clients with superb value and, typically, significant cost savings as compared with other law firms.

Transaction types that we handle include structured derivative products and synthetic investments, as well as swaps, caps, floors, collars, forward rate transactions and forward purchases and sales. 

Our OTC derivatives work begins with basic derivatives documentation, including ISDA and non-ISDA master agreements, confirmations, credit support agreements, control agreements, guarantees and related documentation, as well as industry-standard documentation for foreign exchange, currency forwards, currency option and related OTC transactions.  We also assist in structuring and preparing the full range of documentation covering structured transactions, such as collateralized loan obligations, collateralized bond obligations, credit-linked notes, synthetic CDOs and other complex products.

We regularly advise hedge funds, mutual funds, pension plans, investment advisers, corporations, brokerage firms and other financial services providers on the documentation, and regulatory and compliance issues relating to their use, of futures contracts.  We also register firms as commodity pool operators, commodity trading advisors, futures commission merchants and introducing brokers with the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), and advise them on CFTC and NFA disclosure, reporting and recordkeeping requirements, as well as help them obtain exemptions from CFTC and NFA regulations.  We regularly review account agreements between registered and private funds (including procedural and recordkeeping agreements), ERISA plans and other clients and futures commission merchants or broker-dealers regarding the trading of futures contracts and options, and prepare supervisory and internal liability control policies and procedures regarding futures and options advice and trading.

Loan Trading Activities
K&L Gates’ Loan Trading Group focuses on assisting our clients in all aspects of the trading environment.  By working closely with our clients, including some of the leading secondary loan trading divisions of large financial institutions, we are consistently exposed to all facets of the marketplace and are experienced in resolving the most complex issues that face both large dealers and large buy-side firms in both par debt and distressed debt trading under LSTA and LMA.  As a law firm member of The Loan Syndications and Trading Association (LSTA), our lawyers are committed to working with other participants in the domestic loan trading market to continually increase the efficiency of the trading and settlement process.  We are also a member of the Loan Market Association (LMA) for purposes of handling transactions governed by English law.  We work on a daily basis with our clients to review trade confirmations and to draft and negotiate cash collateral agreements, confidentiality agreements and standard purchase and sale documents.

Our representation of the firm’s loan trading clients draws on our full range of capabilities as a law firm.  In addition to advising clients on current loan trading issues, we regularly provide advice regarding tax, regulatory and bankruptcy issues that impact the loan trading process.
K&L Gates’ Loan Trading Group forms a key component in the array of capital market services we provide to our financial services clients.  Our extensive experience working in the loan trading market, when combined with our financial services practices, allows us to provide an exceptional level of service to an institution seeking to enter into or increase its presence in this growing market.

Securities
K&L Gates partners also have decades of experience representing domestic and foreign issuers, secondary sellers, underwriters and other financial services institutions in public offerings.  Representations have included a wide range of transaction types, including SEC-registered initial public offerings and secondary offerings; Rule 144A and Regulation S placements; a wide variety of capital markets debt securities, including senior, senior/subordinated, secure/unsecured, mezzanine and highly structured such as project finance, lease-financed, mortgage-backed and other asset-based (cash flow or market value) debt; a wide variety of equity-based securities; and creation of innovative capital markets products, including securities lending products.

Some additional highlights:

• According to IPO Watch, in two of the last five years, K&L Gates ranked among the top 10 U.S. issuer’s counsel based on the total number of IPOs completed;
  
  
• We have been involved in 100 IPOs over the last ten years; and
  
  
• Our lawyers have handled more than 300 total public equity and debt offerings over the last decade, with a dollar volume of approximately $47 billion.

Click here to visit our Securities Practice description.

Project Finance
K&L Gates has extensive experience in U.S. and international project financings involving energy development, production and infrastructure facilities—for more information, please see K&L Gates’ Projects/Public Private Partnerships description.  K&L Gates has represented clients in the financing of multiple independent power projects, ranging from large gas-fired facilities to wind and other renewable energy projects.  K&L Gates regularly advises lenders and mezzanine investors in the financing and, in some cases, restructuring, of project-financed energy facilities.

Our U.S.-based Public Finance Practice consistently ranks in the top 10 such practices in the United States in terms of dollar value of bond issues (Thomson Financial).  K&L Gates has been involved in the public financing of a wide variety of utility systems and energy projects.  Our municipal finance lawyers have represented issuers and underwriters in numerous financing transactions, ranging in size from several million to more than a billion dollars each.

Asset Securitization
The following is a representative list of asset securitization transactions which our lawyers have completed.

Concord Funding Company, L.L.C.
Senior Variable Funding Notes/Mezzanine and Subordinated Term Notes, Series 2006-1
Secured by Customer Margin Loans on Precious Metals
Amount:  $75,000,000
Placement Agent Piper Jaffray
June 2006

BASIC Asset Backed Securities Trust 2006-1
Mortgage Pass-Through Certificates, Series 2006-1
Amount:  $203,679,000
Issuers Counsel- Joint Bookrunners Credit Suisse and Barclays Capital
April 7, 2006

CBA Commercial Assets. Series 2006-1 Trust
Small Balance Commercial, Mortgage Pass-Through Certificates, Series 2006-1
Amount: $166,804,318
Counsel to Issuer
Co-Lead Managers: RBS Greenwich Capital and Deutsche Bank Securities
Co-Manager: CBA Securities, LLC
April 24, 2006

BASIC Net Interest Margin Trust 2006-1 Notes
Amount:  $4,645,000
144A Offering by Credit Suisse
May 12, 2006

Concord Funding Company, L.L.C.
Senior/Mezzanine/Subordinated  Term Notes, Series 2005-1
Secured by Customer Margin Loans on Precious Metals
Amount:  $25,000,000
Placement Agent Piper Jaffray
December 2005

NYCTL 2005-A Trust
Tax Lien Collateralized Bonds, Series 2005-A
Amount: $49,837,000
Counsel to the Underwriters

CBA Commercial Assets. Series 2005-1 Trust
Small Balance Commercial, Mortgage Pass-Through Certificates, Series 2005-1
Amount: $214,904,613
Counsel to Issuer
Underwriter: Greenwich Capital Markets, Inc.
July 26, 2005

Aegis Asset Backed Securities Trust
Mortgage Backed Notes, Series 2005-2
Amount: $975,000,000
Underwriters Counsel-Lead by UBS Investment Bank
April 14, 2005

Aegis Class N Notes Series 2005-2
Amount: $45,990,000
144A Offering by UBS Investment Bank
April 14, 2005

FTN: Financial Auto Securitization Trust 2004-A
Massachusetts based Federal Credit Union - Seller/Servicer
Amount: $50,000,000
Counsel to Seller/Servicer

Represented the acquirer of Successor-in-Interest Contracts representing payments from the Commodity Credit Corporation to tobacco producers and quota holders, including the negotiating and documentation of a revolving credit facility for such purchases.

Aegis Asset Backed Securities Trust
Mortgage Backed Notes, Series 2005-1
Amount:  $879,750,000
Underwriters Counsel- Lead by Bear Stearns
February 16, 2005

Aegis Class N Notes Series 2005-1
Amount:  $42,920,000
144A Offering by Bear Stearns
February 16, 2005

NYCTL 2004-A Trust
Tax Lien Collateralized Bonds, Series 2004-A
Amount: $50,035,000
Counsel to the Underwriters

Aegis Asset Backed Securities Trust
Mortgage Pass-Through Certificates, Series 2004-5
Amount:  $827,050,000
Underwriters Counsel- Lead by Bear Stearns
October 21, 2004

Aegis Net Interest Margin Trust 2004-5 Notes
Amount:  $37,600,000
144A Offering by Bear Stearns
October 21, 2004

Aegis Asset Backed Securities Trust
Mortgage Pass-Through Certificates, Series 2004-3
Amount:  $812,010,000
Underwriters Counsel- Lead by CSFB
June 24, 2004

Aegis Net Interest Margin Trust 2004-3 Notes
Amount:  $37,600,000
144A Offering by CSFB
June 24, 2004

Concord Funding Company, L.L.C.
Senior/Mezzanine/Subordinated  Notes, Series 2004-1
Secured by Customer Margin Loans on Precious Metals
Amount:  $25,000,000
Placement Agent Northland Securities
June 2004

Aegis Asset Backed Securities Trust
Mortgage Pass-Through Certificates, Series 2004-2
Amount:  $780,000,000
Underwriters Counsel - Lead by Bear Stearns
April 7, 2004

Aegis Net Interest Margin Trust 2004-2 4.5% Notes
Amount:  $62,196,000
144A Offering by Bear Stearns
April 26, 2004

Represented the equity investor in the structuring and execution of a synthetic investment in a $1 billion synthetic CDO.

Meritage Mortgage Loan Trust
Asset Backed Certificates, Series 2004-1
Amount:  $671,480,000
Seller’s Counsel - Lead by RBS Greenwich Capital
March 25, 2004

Aegis Asset Backed Securities Trust
Mortgage Pass-Through Certificates, Series 2004-1
Amount:  $487,500,000
Underwriters Counsel- Lead by Bear Stearns
January 15, 2004

Aegis Net Interest Margin Trust 2004-1 5% Notes
Amount:  $39,500,000
144A Offering by Bear Stearns
January 28, 2004

Freddie Mac
 Multiclass Certificates, Series 2940
Amount:  $200,000,000
Counsel to Underwriter:  Amherst Securities Group, L.P.
February 28, 2005

Freddie Mac
Multiclass Certificates, Series 2940
Amount:  $210,963,415
Counsel to Underwriter:  Amherst Securities Group, L.P.
November 30, 2004

Freddie Mac
Multiclass Certificates, Series 2868
Amount:  $275,166,593
 Counsel to Underwriter:  Amherst Securities Group, L.P.
October 29, 2004

Freddie Mac
Multiclass Certificates, Series 2865
Amount:  $277,938,573
 Counsel to Underwriter:  Amherst Securities Group, L.P.
September 30,2004

Freddie Mac
Multiclass Certificates, Series 2851
Amount:  $219,718,582
 Counsel to Underwriter:  Amherst Securities Group, L.P.
August 30, 2004

USAutos Series 2004-1 Trust
5.10% Freedom Certificates, USAutos Series 2004-1
Amount:  $4,000,000
 Counsel to Underwriter:  Amherst Securities Group, L.P.
October 28, 2004

CBA Commercial Assets, Series 2004-1 Trust
Small Balance Commercial, Mortgage Pass-Through Certificates, Series 2004-1
Amount:  $102,025,949
Counsel to Issuer
Underwriter:  Greenwich Capital Markets, Inc.
December 29, 2004

Asset Backed Lending
Among the representative asset backed lending transactions handled by K&L Gates lawyers in the recent past are:

• Represent lender on warehouse program to fund originators of high-yield commercial and residential mortgage loans.
  
  
• Represent client in creation of more than $1 billion aggregate warehouse facilities to correspondents from whom the client purchases residential mortgages.
  
  
• Represent client in establishing subordinated debt facility to facilitate originator’s obtaining warehouse line for mortgage loan aggregation.
  
  
• Represented lender in $200,000,000 warehouse facility made to special purpose company that finances time share loans.
  
  
• Represented lender in connection with an asset backed $250,000,000 financing facility for multiple gaming establishments in Nevada.
  
  
• Represented national mortgage lending client in a $540,000,000 mortgage warehousing revolving credit facility.
  
  
• Represented client borrower in $550,000,000 syndicated revolving credit facility.
  
  
• Represented client borrower in $100,000,000 asset backed loan facility.
  
  
• Represented client borrower in $50,000,000 asset backed loan facility.
  
  
• Represented issuer in a syndicated $70,000,000 subordinated note facility.
  
  
• Represented 26 bank syndicate in a $450,000,000 secured line of credit.
  
  
• Represented a commercial bank in a $45,000,000 secured revolving line of credit and term loan to a major mail order catalogue and retail chain.
  
  
• Advised a U.S. bank in a global restructuring of a multimillion dollar credit facility to a Mexican borrower.
  
  
• Represented client borrower in a $55,000,000 secured line of credit from a national lender.
  
  
• Represented client lender in multimillion dollar secured construction/line of credit facility to assisted living developer.
  
  
• Represented borrower client in $50,000,000 secured line of credit facility from National Consumer Co-operative Bank.
  
  
• Represented broker dealers acting as lenders in connection with various margin and non-margin lending programs secured by investment securities.
  
  
• Represented various quasi-governmental lenders in connection with lending programs secured by mortgage notes and investment securities.
  
  
• Represented a borrower client in connection with the successful $45,000,000 restructuring of its debt and equity.
  
  
• Represented several lenders in connection with aircraft financings.
  
  
• Represented a national lender for its asset based lending program, involving secured loans totaling more than $1,000,000,000.
  
  
• Represented multiple affiliated borrowers in a $100,000,000 syndicated loan facility secured by assets across the United States and Canada.
  
  
• Represented foreign lead lender and agent bank in a nationwide secured, club financing of a manufacturing company and its subsidiaries.
  
  
• Represented a bank group in a $60,000,000 revolving line of credit and term loan to a basic metals industry borrower.
  
  
• Represented oil and gas exploration and production company in a $65,000,000 credit facility.
  
  
• Represented bank in approximately thirty-five secured loans to technology companies.
  
  
• Represented equipment manufacturer in a $125,000,000 revolving credit facility provided by syndicate of banks.
  
  
• Represented developer of solid waste disposal facilities in various bank financings.
  
  
• Represented overseas lender in connection with various commodity financings.

Structured Finance
The following is a representative list of recently completed transactions for which we have advised or represented clients:

• Represented overseas client bank in $80,000,000 structured loan to finance the acquisition of equity interests in leveraged lease projects.
  
  
• Represented senior secured lenders providing $170,000,000 or construction and permanent financing for a combined cycle power plant in Latin America.
  
  
• Advised the equity investor and subordinated debt holder in connection with a $40,000,000 synthetic lease of two combustion turbines.
  
  
• Advised all financing sources in connection with the synthetic lease of a publicly-traded corporation's new worldwide headquarters.
  
  
• Assisted a publicly-traded developer and operator of assisted care and senior housing properties regarding the structuring, negotiation, documentation and implementation of transactions for the construction of over 50 facilities.
  
  
• Advised an equity participant and liquidity provider in connection with a synthetic lease for the financing of $300,000,000 of power generating equipment using a commercial paper structure.
  
  
• Represented an equity participant and liquidity provider in connection with the financing of over $100,000,000 of aircraft engines and related equipment on a synthetic lease basis using a commercial paper structure.
  
  
• Advised the investment advisors and lessor/borrower regarding the structuring and implementation of an off balance sheet transaction using the proceeds of tax exempt debt to finance the construction of a $38,000,000 administrative building for a major charitable organization on the west coast.
  
  
• Advised the investor in connection with the acquisition and financing of 16,000 acres of timberlands in a tropical location.
  
  
• Represented a publicly traded entertainment and media concern in connection with the financing of its corporate aircraft on a synthetic lease basis.
  
  
• Represented the seller/lessee of a waste processing coal-fired electricity production facility in connection with a sale/leaseback transaction utilizing proceeds from the issuance of tax-exempt debt.

Loan Trading

• Domestic:  Represented leading sell-side as well as buy-side market participants in many hundreds of recent purchases and sales of loans made to borrowers under syndicated credit facilities and trades of claims against corporations in chapter 11 reorganizations, including loans to and, where applicable, claims against Boston Generating, LLC, Cricket Communications, Inc., CSC Holdings Inc. (Cablevision), Dynegy Holdings Inc., Fleming Companies, General Chemical Industrial Products Inc., Genuity Inc., Inpower Limited, J.L. French Automotive Castings, Inc., Mirant Corporation, NRG Energy, Inc., Private Mini Storage Realty, L.P., UPC Distribution Holding B.V., Xerox Corporation, and Strategic Value Partners LLP.
  
  
• Foreign:  Represented sell-side as well as buy-side market participants in recent purchases and sales of loans made to borrowers under syndicated credit facilities and trades of claims governed by English law, including loans to and, where applicable, claims against Eggborough Power Limited, Telewest Communications Networks Limited, Interdean Group Limited, Sons of Gwalia Ltd., Jarvis PLC, Grand Hotels (M) Intermediate Holding Company I Limited (Le Meridian Hotels), Service Point Solutions and Strategic Value Partners LLP.

Derivatives, Structured Products and Futures

• Representing an investment manager in connection with a Euro 2.5Billion CDO listed on the Irish Stock Exchange
  
  
• Representing the investment manager in connection with a US$250,000,000 CDO, including an investment by the manager in the equity of the issuer.
  
  
• Representing the arranger and sponsor of a Collateral Fund Obligation transaction, the underlying collateral of which is comprised of interests in fund of hedge funds.
  
  
• Represented leading derivatives dealers in the preparation, negotiation, and execution of hundreds of master agreements and related documentation covering swaps, options and forward transactions on a full range of underlying assets and indices.  Counterparties included major multi-national corporations, hedge funds, mutual funds, pension funds, commercial banks, insurance companies and government sponsored entities.
  
  
• Advised the credit portfolio manager of a money center bank on the use of credit default swaps to manage portfolio credit risk.
  
  
• Represented equity investors in the structuring and execution of investments via credit default swaps in large synthetic CDOs.
  
  
• Advising both dealers and hedge funds in structured transactions involving total return swaps on underlying equity securities and fixed income obligations, including bonds, loans and senior, mezzanine and residual tranches of REMICs.
  
  
• Representing the sponsor of a synthetic fund of hedge funds offering in registration with the Securities and Exchange Commission.  The investment will be principal protected.
  
  
• Representing the sponsor of a privately placed structured investment in a fund of hedge funds and managed futures product.  The investment will be principal protected.
  
  
• Represented the main participants in domestic and cross-border hedge-fund linked structured products, including fund of hedge funds managers, investors, and swap counterparties.
  
  
• Represented a Federal Home Loan Bank in the structuring of a certificate of deposit program under which the returns on the CDs were predominantly based on changes in the S&P 500 Index.
  
  
• Represented the sponsor of a synthetic fund of hedge funds offering in registration with the Securities and Exchange Commission.
  
  
• Assisted several public companies in the design and execution of their issuances of debt instruments having embedded derivatives features and in those issuers’ related hedging activities.