The last few weeks have proven to be a tumultuous period for the capital markets, and with it a stark (and painful) reminder has been duly delivered on the impact that they have on all aspects of business and the wider economy. Securitisation has also shown that it is not immune to this turmoil demonstrated
Securitisation type technology showing a glimpse of its mettle
Estimated read time: 2 minutes 45 seconds
It would be fair to say that when it comes to securitisation, I have always been very upbeat about the huge potential of this technology and the integral role that it can play. This is not only in providing a cheaper form of credit for borrowers but also
Structuring securitisations in a post-Brexit world
Read time: 3 minutes 3o seconds
Background
Although the United Kingdom (UK) left the European Union (EU) at 11pm on 31 January 2020, the terms of the Withdrawal Agreement between the UK and the EU provide for a transition period until 31 December 2020 (Exit Day). During the transition period, the European Securitisation Regulation (ESR)
EBA publishes additional supervisory measures on legislative and non-legislative moratoria on loan repayments in light of COVID-19
Read time: 5 minutes
On 2 April 2020, the European Banking Authority (EBA) published guidelines on legislative and non-legislative moratoria on loan repayments in light of COVID-19 (EBA/GL/2020/2) (the Guidelines). The Guidelines were updated by a supplementary supervisory statement addressing the treatment of securitised exposures subject to payment moratoria, issued on 22 April 2020.
The supplementary supervisory statement addressing securitised exposures establish where legislative and non-legislative moratoria should not trigger default or forbearance classifications for regulatory capital purposes and where actions taken under payment moratoria will not be considered a breach of the prohibition of ‘implicit support’.
Continue Reading EBA publishes additional supervisory measures on legislative and non-legislative moratoria on loan repayments in light of COVID-19
Fairhold Securitisation – can noteholders claim advisers’ fees through the trustee?
Read time: less than 1 minute
This week saw the High Court clash between the swap provider, UBS, and the recently appointed replacement note trustee (Glas Trust Corporation) on the embattled Fairhold Securitisation. The dispute at hand centres on whether or not the ad hoc noteholders group’s fees and expenses (comprising the fees of its financial adviser and lawyers) can be recovered from the waterfall, effectively subordinating payments to the swap providers and noteholders. The financial adviser’s fees were reported to be in excess of £3.75m.
Continue Reading Fairhold Securitisation – can noteholders claim advisers’ fees through the trustee?
Class X litigation: Not so appealing
| Read time: 2 minutes |
Following their loss at first instance in Titan Europe 2006-1 P.L.C. and others [2016] EWHC 969 (Ch) (the background to the case and our commentary can be found here), the Class X Noteholder appealed the decision in respect of the central issue in the proceedings – when calculating the Class X Interest Rate in accordance with the Conditions, is it necessary to take account of any additional interest due under the Loans following a default?
Continue Reading Class X litigation: Not so appealing
With-Hold on a second?! New ISE rule leads to automatic de-listing of debt securities at scheduled maturity
Picture this: it’s 1793. In England, George III is on the throne and the Bank of England issues the first ever ‘fiver’. In the U.S.A, George Washington hosts the first US cabinet meeting as President and the capital moves from Philadelphia to Washington, D.C. In France, the French Revolution is in full swing with King Louis XVI guillotined, and France becomes the first country to adopt the metric system.
And in Ireland, the Irish Stock Exchange is founded. Though of course, that is not to say that there weren’t other important things happening in Ireland at the time as well….
Continue Reading With-Hold on a second?! New ISE rule leads to automatic de-listing of debt securities at scheduled maturity
Moving out of the dog house? The case for easing punitive capital requirements on securitisations
Eight years on from the credit crisis, the drive to rehabilitate securitisation continues.
The most recent body to speak up for the increasingly regulated structures is the European Banking Authority, which last month published an Opinion and an accompanying Report on the establishment of a European framework for qualifying securitisations for the purposes of determining
The issue of sanctions
Much has been written regarding the recent EU and US sanctions targeting the Russian capital markets, military and oil sectors (our own commentary can be found here) and the broad nature of the sanctions has, it would seem, produced some (probably) unintended consequences when applied to the mechanics of day to day capital markets operations. On their face, the capital markets sectoral sanctions are designed to cut off the ability of the sanctioned companies to access funding in the equity and debt markets. Hence, broadly speaking, anybody who must comply with EU or US sanctions cannot participate or deal in any new debt or equity issued by a sanctioned entity once they have been put on the sanctions lists. Existing debt or equity issued prior to the implementation of sanctions is grandfathered.
Quelle horreur!
€32,000,000. A horror indeed for Colliers International UK (plc) (Colliers) as Mr Justice Blair awarded that amount to the issuer of the Titan Europe 2006-3 CMBS (Titan). The judgment was for the loss suffered by Titan in relation to the negligent valuation by Colliers of a property in Nuremberg originally occupied by the (now bankrupt) German mail order giant Quelle (see judgment of Titan Europe 2006-3 plc v Colliers International UK plc (in liquidation) [2014] EWHC 3106 (Comm) here).
Aside from questions that arose in relation to the valuation of the property itself, the case considered pertinent questions of loss and reliance in relation to securitisation issuers, namely whether:
- Titan was the right entity to bring the claim; and
- Titan could be said to have relied on the valuation provided by Colliers.