SCI Awards: North American Law Firm of the Year

Category: Capital Relief Trades ABS

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Winner: Clifford Chance

Clifford Chance has developed a strong reputation in the market, ranking as North America’s top law firm of the year for the second year running. The firm has helped to navigate clients with deals of a complex nature.

The last 12 months has seen the continued growth of transactions in the US, where the firm has continued to dominate the non-agency capital relief trades market. A particular highlight in this regard has been the Texas Capital US$275m credit-linked notes issuance, which was the first issuance of credit-linked notes by a US regional bank.

“Texas Capital was an interesting deal to work on; the deal set a new ground - both in taking in what was needed and choosing the asset class,” says David Felsenthal, partner at Clifford Chance.

In the US, the biggest trend driving the market this year has been the increased activity of regional banks in this market. The firm has been involved in all of these transactions, starting with Texas Capital Bank issuing its first credit risk transfer deal in March this year. The next regional bank to jump into the market was Western Alliance just earlier this summer.

As a result, Clifford Chance has become the go-to firm for US regional banks looking to enter this market. The firm has also acted on behalf of large US commercial banks, including Goldman Sachs and Citi, as such banks continue to expand their use of CRT.

Felsenthal adds: “We have represented some of the largest banks for some time and the market has expanded over the last few years. We are constantly speaking to other banks who have an interest in using these credit risk tools and we have been actively involved in the future growth and direction. This is exciting – the area changes year to year, but the process can be opaque and hard to predict.”

Outside the US, the London office of Clifford Chance has also continued to act on all the Canadian CRT transactions to come to market over the past year.

Honourable mention: Hunton Andrews Kurth

Hunton Andrews Kurth represents the dealers in all of Freddie Mac’s STACR offerings and has provided advice in connection with the evolution of the programme to an actual loss payment structure, as well as the transition from direct debt to trust and REMIC issuances. Additionally, the firm represents the underwriters and initial purchasers in all of the Freddie Mac Seasoned Credit Risk Transfer Trust (SCRT) transactions, as well as the structuring agent and lead manager on Freddie Mac’s Multifamily Structured Credit Risk (SCR) Debt Notes transactions. 

Meanwhile, Hunton Andrews Kurth is tax structuring counsel for Fannie Mae’s CAS programme for both single family and multifamily transactions. The firm’s CRT experience also includes representing initial purchasers in structuring deals for private mortgage insurers that transfer the risk of loss under mortgage insurance policies, which – in turn - provides reinsurance credits under the GSE Private Mortgage Insurer Eligibility Requirements (PMIERs) capital requirements.