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Securitization and Structured Finance

Our Securitization and Structured Finance practice lawyers in the United States, Europe, Asia, Australia, and the Middle East assist clients in cash and synthetic structured credit transactions. We act for investment banks, originators, issuers, trustees, and rating agencies as well as other market participants such as investors, corporate service providers, servicers, liquidity providers, and swap counterparties.

Our experience encompasses all of the main securitization asset classes, including automobile loans and leases, aircraft leases, residential and commercial mortgages, Shari’a compliant instruments, and leveraged commercial loans. We have also been actively involved in advising clients on LIBOR benchmark replacement fallbacks for securitizations. We have experience in all aspects of capital markets, including registered offerings and Rule 144A and Regulation S offerings, private placements, listed security offerings, and ABCP.

As the line blurs between conventional and structured finance, we adapt securitization techniques to new situations and new technologies to meet the evolving needs of market participants. We draw upon the comprehensive resources of a global integrated law firm to address the full scope of related regulatory, legal, and other issues that arise in complex securitization and structured finance transactions across industries and jurisdictions, including tax, ERISA, bankruptcy, bank regulatory, and derivatives support.

Areas of Practice 

Asset Backed Securities (ABS)

We represent arrangers, sponsors, and others in securitizations and structured finance transactions involving a wide range of consumer and commercial assets. We also represent investors in connection with investments in non-mortgage ABS as well as in connection with due diligence for private equity investments in specialty finance companies with securitization platforms.

We cover a wide variety of transactions involving term and revolving assets, including structured warehouse facilities, ABCP conduits and medium term note programs, term securitizations, and revolving structures. We have significant experience in consumer financial assets such as agency and non-agency mortgage loans, renewable energy installation loans, automobile loans and leases, credit card, receivables, and student loans.

We work with non-consumer ABS, such as project finance loans, commercial loans, franchise loans, aircraft loans and leases, airline ticket and cargo receivables, non-aviation equipment leases, export receivables, and intellectual property. We also have experience in the securitization of non-performing assets, including non-performing loans, real estate tax liens, and personal tax liens.

We also have experience in the securitization and warehousing of esoteric or emerging assets, including renewable energy installation loans, US Small Business Administration loans, life settlement policies, and reinsurance risks.

Commercial Real Estate Securitization 

We regularly represent originators, servicers, special servicers, trustees, rating agencies, investors, and others in connection with securitizations of commercial mortgage loan portfolios and single large loans, and in restructurings of securitized mortgage loans and B-piece investments. We have experience in a wide range of commercial mortgage-backed security (CMBS) and commercial real estate (CRE) collateralized loan obligation (CLO) transactions throughout the capital structure and across the deal life span. We advise:

  • Lenders and borrowers on loans originated for securitization.
  • Servicers and special servicers for CMBS and CRE CLO transactions in relation to general servicing issues, transfers, asset management, loan assumptions, modifications, and defeasances, including real estate mortgage investment conduits (REMIC), effectively connected income, and other tax implications.
  • Arrangers and underwriters in structuring CMBS deals, including real estate due diligence and swap advisory work.
  • Trustees, corporate service providers, investors, and rating agencies at all stages of the life cycle of a transaction, including restructurings, defaults, enforcement, and litigation.
  • Investors and others in third-party risk retention arrangements for CMBS transactions.
Residential Mortgage-Backed Securities  (RMBS)

We represent underwriters in offerings of residential mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae as well as issuers and others in private label RMBS transactions in the United States. We advise servicers and special servicers for RMBS transactions in relation to general servicing and consumer regulatory issues, transfers, asset management as well as loan assumptions and modifications, including REMIC and other tax implications.

Collateralized Loan Obligations 

We regularly represent arrangers, collateral managers, trustees, and other transaction participants in CLO transactions in both the United States and in European markets. We have experience in cash and synthetic CLOs, including cash-flow, market value, and balance sheet CLOs involving corporate, emerging market, and real estate loans, as well as single-tranche and full capital structure synthetic transactions.

We understand the full range of issues that are relevant to investors and managers of CDOs, including credit risk retention, tax, commodities regulation, and investment advisor regulation, both in the United States and the United Kingdom.

Synthetic Structures, Derivatives, and Repos

Derivatives are an important feature of our securitization and structured finance group. We routinely work with swaps and other derivatives used as hedges for assets or transactions. We have experience with synthetic risk transfers using total return swaps and credit default swaps. We also understand the documentation, insolvency issues, and regulatory considerations in swap transactions in relation to securitization and structured finance transactions. We actively advise clients on swap regulatory developments under the Dodd-Frank Act and over-the-counter derivatives regulation under European Market Infrastructure Regulation (EMIR) and Basel requirements that impact synthetic risk transfers.

Islamic Securitization and Capital Markets Transactions 

We have an Islamic securitization capacity in our Middle East and London offices. Our partners have advised on the structuring and execution of sukuk transactions and multi-funding platforms using Islamic compliant structures including ijara, musharaka and murabaha. We also advise on sukuk defaults and restructurings. We have strong capability in related areas of Islamic financing including hedging under the International Swaps and Derivatives Association and the International Islamic Financial Market Tahawwut (Hedging) Master Agreement.

Emerging and Unconventional Assets 

We have experience in securitization and monetization of a wide range of off-the-run assets, including EBO loans, interest-only strips of SBA loans, renewable energy receivables, cryptocurrencies, and tax liens.

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Played a key role advising the senior tranche lenders and structuring agent in the Airline Economics 2020 “Overall Deal of the Year,” which involved the use of CLO technology to finance a US$3.6 billion portfolio of commercial aircraft loans.

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