SCI CRT Awards 2020

Category: Capital Relief Trades ABS

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Law Firm of the Year: Allen & Overy

In a highly disrupted year, Allen & Overy (A&O) has distinguished itself by not only maintaining its significant market share, but also by being able to expand its offering into new markets, advising on a variety of deals in numerous geographies as well as a variety of first-of-their-kind deals. At the same time, A&O has played a key role in framing post-Covid crisis documentation.

The key is the firm’s holistic approach to the sector, according to A&O partner David Wainer. “We offer breadth and scope and have never viewed SRT as the domain of one or two partners operating in one office. We see it as a collaborative effort across a number of partners and teams in various offices and, as we’ve seen the market grow and diversify, that approach has paid dividends. In London alone, we have Parya Badie and Guy Antrobus, as well as myself actively working on balance sheet synthetics, and partners such as Salim Nathoo and Sally Onions supporting a busy cash SRT practice.”

He continues: “Our primary focus has been to try and do the most interesting work for the most interesting clients. While we value working with seasoned issuers who regularly tap the market, we have worked hard to develop a reputation as a go-to firm for banks looking to do their first SRT trades or for others trying to do new or innovative things in the SRT space. The close collaboration that comes from helping our clients navigate their way through the myriad of legal and regulatory issues when executing these transactions is very rewarding. The process can be long and bumpy, but that experience helps foster stronger bonds.”

The stand-out deals that A&O advised on over the last 12 months are too numerous to mention here, but include: the first SRT deal to reference a portfolio of exclusively UK ESG loans – Project Grasshopper; the first SRT transactions for Santander Consumer Bank in Italy and Sweden; the first SRT transaction for BNPP Fortis in Belgium; the first SRT transaction for Banco Sabadell in Spain; and the first syndicated unfunded SRT transaction involving insurers. Among those, Wainer says: “NatWest’s Project Grasshopper was one highlight, a deal which garnered much interest for its novel ESG sector focus. We were proud to be involved in such a widely acclaimed deal.”

Further, he says: “Another innovative deal was Santander’s unfunded syndication to insurers, where we acted for Fidelis, and its successful conclusion reflected a long-talked about development in the market. We were also involved in a number of first transactions showing the market expanding into new geographies.”

For example, A&O advised BNP Paribas Fortis on the first deal in Belgium last December and is now working for two other Belgian debutants. “That has become a familiar pattern – once we successfully close one deal in one jurisdiction, others tend to follow and our initial involvement places us in a favourable position to be involved in the subsequent transactions,” says Wainer.

“It is true also in other more mature markets like Spain, where our regular work advising on deals this year for Caixa, BBVA and Santander helped us scoop the mandate acting for first-time issuer Banco Sabadell - a deal which, given its launch mid-pandemic in June, was especially pleasing to see close successfully,” he adds. “We’ve also benefited from a close relationship with the EIF and EIB, each of which became particularly active in the crisis, stepping in to help banks manage their capital and facilitate new lending into depressed markets.”

Another highlight for the firm this year has been A&O’s role at the forefront of drafting standard language to help the market come to terms with the impact of Covid-19-triggered general payment moratoria and the related EBA guidance on existing provisions (such as the impact of payment holidays on credit events and refinancing provisions). “This began with the development of standardised language for the EIF, which was a natural consequence of the deal work we were doing for them,” Wainer says. “We started to build that new wording into EIF deals immediately and have since seen it replicated more broadly in other deals as well.”

Honourable mention: Linklaters
As one of the major law firms in the SRT market it is to be expected that Linklaters has clients in every part of the market from arrangers and originators; to fund investors; to reinsurers; to the EIF. But it is the work it has done with investors and in the regulatory space that merits an honourable mention this year.

The list of deals on which Linklaters advised an investor, or sometimes multiple investors with different teams of lawyers, is a list of landmark and innovative transactions. Highlights include many of this year’s SCI award winners: Project Vale, Project Meno, Project Grasshopper and Resonance V. In addition, the firm assisted clients in a number of complex private deals.

Among Linklaters’ regulatory work this year it has assisted the International association for credit portfolio managers (IACPM) with its responses in two key areas. First, to the EBA’s consultation paper on an STS regime for synthetic securitisations; and second, to the European Commission’s request for information on how the Capital Markets Union could further assist banks and investors in contributing to real economy finance after Covid-19.

For complete coverage of SCI’s 2020 CRT Awards, click here.