SOFR is a secured rate derived from borrowing and lending activities on US treasuries, while LIBOR is based on a survey of quotations from participating banks regarding what they believed the going-forward unsecured interest rate should be. The proposed requirements would impose a significant number of new disclosure requirements for registrants, including disclosure of: As drafted, the proposed rules do not apply to ABS issuers, although the SEC solicited comment on whether they should apply and in what form. Duddell Street Acquisition Corp.s Business Combination with FiscalNote Holdings, Inc. Shearman & Sterling represented Citigroup Global Markets Inc. and J.P. Morgan Securities LLC in connection with Duddell Street Acquisition Corp. (Duddell Street)'s business combination with FiscalNote Holdings, Inc. (FiscalNote). Conversely, the more numerous the sale characteristics, the greater the likelihood that a purported sale will be respected as such. The most typical credit enhancements include over-collateralisation, subordination of junior tranches, cash reserves and excess yield on the underlying assets compared to what is needed to service the asset-backed fixed-income securities. Whether this option covers registered ABS that are subject to Exchange Act reporting requirements but where those requirements were suspended before ABS issuers had to file for the life of the deal poses an interpretive question. Underwriters (including initial purchasers in a 144A transaction) and placement agents are registered broker-dealers responsible for placing the ABS. Investors in securitisations include banks, asset managers, insurance companies, pension funds, mutual funds, hedge funds and high net worth investors. The firms initiatives include WISER (Womens Initiative for Success, Excellence and Retention), BLAQUE (Black Lawyers Aligned in the Quest for Excellence), AACES (Asian Attorneys for Community, Empowerment and Success), and finally: BUILD (Black Undergraduate Internship & Lawyer Development). The proposed rules would also prohibit private fund advisers from engaging in certain compensatory and other practices which have the effect of creating conflicts of interests between private funds and their advisers. The ARRC, after issuing consultations and soliciting feedback, recommended fallback language for securitisations to facilitate a benchmark transition from LIBOR to SOFR in May 2019. Delaware statutory trusts (DSTs) and Delaware limited liability companies (DLLCs) are often the entities of choice for securitisations. Providing U.S., English, French, German, and Hong Kong law advice from our offices in many of the worlds major financial centers, we have the knowledge and skills to counsel clients on Our clients rely on our tax planning at every stage of a transaction, from early planning to successful conclusion, and recognize and appreciate our creativity in solving complex tax issues, both local and cross-border. Violations of the swaps rules promulgated by the CFTC will be subject to enforcement and penalties by the CFTC. The regulatory authority is primarily divided between the CFTC and the SEC, with the US banking regulators setting capital and margin requirements for banks. According to that section of the Rule 144A adopting release, [i]nstead of the financial statements and other information required about issuers of more traditional structures, the Commission would interpret the information requirement to mandate provision of basic, material information concerning the structure of the securities and distributions thereon, the nature, performance and servicing of the assets supporting the securities, and any credit enhancement mechanism associated with the securities. Insurance companies capital rules are typically more closely tied to ratings. Trustees typically have a security interest in the underlying pledged assets and act as communications and payment agents. We like to see that, at the very least, candidates attended firm open days or other non-assessed events that shows they're committed to a career in the law., Around 5% of applicants go on to a first-round interview. Prenetics Announces Closing of Business Combination with Artisan Acquisition Corp. Shearman & Sterling represented the placement agents on the PIPE in connection with Prenetics Global Limiteds previously announced business combination with Artisan Acquisition Corp. Guangdong Hong Kong Greater Bay Area Holdings Limited's Exchange Offer and New Money Offering. These are typically used in dealer floor plan securitisations and credit card securitisations. The DoddFrank Act introduced a mandate to the SEC and the bank regulatory agencies to promulgate rules requiring securitisers to retain credit risk, which are codified in the relevant sections for the relevant banking regulator (12 Code of Federal Regulations (CFR) part 43 for the Office of the Comptroller of the Currency; 12 CFR part 244 for the Federal Reserve System; 12 CFR part 373 for the Federal Deposit Insurance Corporation (FDIC); 12 CFR part 1234 for the Federal Housing Finance Agency; and 12 CFR part 373 for the SEC (the latter is also referred to as Regulation RR)). Shearman & Sterling advised Qxpress Pte. An SPE that is organised as a partnership or an LLC that has elected to be treated as a partnership for tax purposes would not be subject to entity-level tax, but transfers to a securitisation SPE that is treated as a partnership for tax purposes may have different tax consequences than transfers to a disregarded entity and, as such, it is possible to structure the SPE (and use a multi-SPE structure) so as to optimise the securitisation for the desired tax neutrality. Investors in unfunded ABS tranches will typically have contingent funding obligations and may be required to provide additional credit support or face replacement if their credit drops below agreed levels. Shearman & Sterling represented the initial purchasers in connection with Skyfame International Holdings Limiteds offering of $100 million 13% senior notes due 2023, unconditionally and irrevocably guaranteed by Skyfame Realty (Holdings) Limited. However, transactions that comply with Rule 144A and Regulation S permit qualified institutional buyers and foreign persons to freely sell to other qualified institutional buyers or other foreign persons. Under the CFPA, a covered person includes (A) any person that engages in offering or providing a consumer financial product or service; and (B) any affiliate of a such a person, if such affiliate acts as a service provider to such person. The covenants will typically address payment obligations, collateral maintenance and perfection obligations, rights and related procedures concerning adding and removing underlying assets, reporting obligations, and various negative covenants intended to maintain the integrity of the securitisation. Tax Laws and Issues. In particular, Reg AB II includes expanded asset-level disclosure requirements for registered offerings of securities backed by specified asset classes that reflects a significant departure from the pool-level information that historically has been given and that is still the dominant form of disclosure in private placements. Advised Ardagh Group on its definitive business combination agreement with Gores Holdings V to create an independent public company. One trainee quipped that its more likeable than other types of finance, because its more tangible and more rewarding when youre working to finance something from nothing! Trainees were quick to highlight that the teams work involves plenty of crossover with the firms offices in Abu Dhabi and Saudi Arabia too. The London office opened 50 years ago and quickly became one of the For example, this can be done by using a tax-transparent organisational form or by incorporating the SPE in a jurisdiction that does not impose such taxes. A guide to legal practice areas. It is important to note that the issue before the Third Circuit is whether the Trusts are indeed covered persons and thus could be vicariously liable for the conduct of their agents, the servicers. Among the reasonable determinations that qualify for relief are the following. Therefore, quotations of Rule 144A ABS generally are allowed without further inquiry by the broker-dealer. These types of contracts can therefore be used as a means of transferring exposure to the assets underlying a securitisation as an alternative to a true sale. Issuers are typically SPEs that are restricted from engaging in activities unrelated to the securitisation. Consequently, a true sale and non-consolidation opinion delivered as part of a securitisation transaction may receive additional comments from accountants relating to assumptions and qualifications that are viewed as potentially problematic under applicable accounting literature. A place like Shearman & Sterling one of the elite international law firms. Equity partner profits are roughly comparable between $2.5M and $3M. A partnership that is deemed to be a publicly traded partnership for US tax purposes could be subject to entity-level tax as if it were a corporation. Of those, five were in Band 2 or above and for the seventh year in a row, the firm is ranked in Band 1 for UK-wide: Projects and Band 2 for UK-wide: Energy & Natural Resources: Power. pleb1. The qualities on which rankings are assessed include technical legal ability, professional conduct, client service, commercial astuteness, diligence, commitment and other qualities most valued by clients. Department profile | Shearman & Sterling LLP. who circulates opportunities weekly via email. However, an outright prohibition against the SPE itself voluntarily filing for bankruptcy is unenforceable as against public policy and such risk must therefore be mitigated by more indirect means. Once all the applications have been submitted, trainees have an end-of-seat roundtable review with the training principal and hiring partners to discuss their prospects and interests. plus a commercial question about our place in the industry., There are four elements to an application that can help a candidate to progress to the interview stage, Gascoyne says. While New York law governs the vast majority of LIBOR-utilising contracts, the statute did not and could not address LIBOR transition issues in all legacy contracts. Synthetic securitisations are permitted. The principal covenants in a securitisation transaction vary, based on the relevant document and the type of securitisation. satisfaction of specified eligibility criteria when sold; all required consents and authorisations having been obtained; various additional tailored representations. DaFa Properties Group Limiteds $100 million Senior Notes Offering. The SEC regulates the offer and sale of securities issued by a synthetic securitisation and the issuers Investment Company Act exemptions are the same as in a traditional securitisation. Shinsun Holdings (Group) Co., Ltd.s $200 Million Senior Notes Offering. 5. This option reinforces the notion that registered ABS where the issuer is subject to Exchange Act reporting requirements do not pose compliance issues under the Rule 15c2-11(b). The DoddFrank Act had the effect of causing swaps to be included in the definition of commodity pool under the CEA and under the definition of security for purposes of the Securities Act and the Exchange Act. If a foreign securitisation issuer were to be engaged in US trade or business for US federal income tax purposes, it would become subject to US federal income tax and potentially also subject to state and local income tax. in the case of a foreign financial institution (defined broadly to include a hedge fund, a private equity fund, a mutual fund, a securitisation vehicle or other investment vehicle), the entity must identify and provide information in respect of financial accounts with such entity held directly or indirectly by US persons and US-owned foreign entities; and. Broker-dealers may be restricted from providing price quotations for private debt securities by virtue of Rule 15c2-11 unless certain periodic information and information about the issuer and the offering is made available to the public in a manner that complies with the SECs no-action letter issued on 30 November 2022. Masdar Floating Solar Photovoltaic Power Project in Indonesia. For a sale of financial assets to be valid and enforceable against third parties, it has to attach and be perfected similar to what applies to a security interest in collateral. Sections 15E and 17 of the Exchange Act and the rules promulgated thereunder establish a detailed set of records that must be created and disclosed to the SEC, and mandate that some of this information must be made publicly available free of charge, including the assigned credit rating and any subsequent upgrade or downgrade. The number of independent directors should be at least equal to the minimum number of members or partners required to continue the SPEs existence. To provide broader relief, Congress passed the Adjustable Interest Rate (LIBOR) Act (the LIBOR Act), which was signed into law in March 2022. When it comes to seat allocation, incoming trainees wont get a choice over their first seat, with each of the newbies placed according to business need. Plus Business Combination with Hennessy Capital Investment Corp. V. Shearman & Sterling is representing the banks who are acting as joint placements agents in connection with Plus business combination with special purpose acquisition company (SPAC) Hennessy Capital Investment Corp. V. Jiayuan International Group Limiteds $130 Million Senior Notes Offering. The District Court subsequently granted a motion for an interlocutory appeal, which was granted by the US Third Circuit Court of Appeals on 3 May 2022. There was a lot of seeking out case law, and work on public deals meant we needed to keep our ears to the ground for developments in the market. Non-research tasks included standard due diligence and reviewing uploads into the data room. Fannie Mae and Freddie Mac are GSEs chartered by Congress for the purpose of providing a stable source of liquidity for the purchase and refinancing of homes and multi-family rental housing. In May 2022, the National Association of Insurance Commissioners (NAIC) issued a letter recommending adjustments to the risk-based capital (RBC) treatment of CLO investments held by insurance companies, in order to eliminate a perceived arbitrage opportunity. KWG Group Holdings Limiteds $258 Million Tap Offerings. abstain from engaging in certain abusive or anti-competitive conduct. Shearman & Sterling continues to garner recognition in the 2023 edition of Chambers UK receiving 35 rankings in the new edition, including 13 practice and 22 individual rankings. In addition to a robust, dedicated structured transactions practice, it offers key practice area expertise to support transactions, including tax, the Employee Retirement Security Act (ERISA), litigation, broker-dealer, real estate and investment company practice lawyers. In response to that further feedback, the SEC staff issued a revised no-action letter in November 2022. Nevertheless, since filing a UCC financing statement is easy and cheap, and would provide perfection regardless of whether the transfer is respected as a sale or whether it is characterised as a loan, such filing is typically the primary means of perfection. In all matters, Shearman & Sterling is dedicated to serving clients at the highest level. The purpose is to allow NRSROs that have not been hired to have access to the same information in real time that is provided to the hired NRSROs. The CLO is actively managed and will acquire and maintain a diversified pool of underlying loans that is managed to conform to a number of concentration limits for the pool, with the goal of maximising return while maintaining the required pool diversification and other relevant transaction criteria. ABS issuers generally do not prepare financial statements. 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