Freshfields Scoops Securitization Award

Freshfields Bruckhaus Deringer has won the International Financial Law Review's Securitization Team of the Year award. Freshfields claimed the top spot for its innovative work on four of the seven deal of the year nominations, according to IFLR, a DW sister publication. The firm worked on the first ever event cancellation risk bond for Fédération Internationale de Football Association, soccer's global governing body, which created a new capital markets product to protect against terrorism and replace FIFA's insurance policy; Gracechurch Life, which is Barclays' big play in the life insurance market that securitized a closed book of life insurance policies, proving that ABS is a realistic funding option for insurers; Punch Taverns' refinancing of its existing securitizations, which was the first time multiple existing securitizations were successfully fused together and refinanced; and Khronos, Morgan Stanley's ambitious multi-jurisdictional, multi-borrower cash commercial-mortgage-backed security.

Meanwhile, Allen & Overy and Sidley Austin Brown & Wood garnered IFLR's award for Securitization Deal of the Year for groundbreaking work on the HBOS covered bond, which used structured finance techniques to replicate the security granted to investors in German Pfandbriefe.

A team of A&O lawyers led by Angela Clist matched the security provided to investors by Germany's longstanding Pfandbriefe rules by transferring assets to an on-balance sheet limited liability partnership and overcollateralizing it by 60%, the same degree as a German deal. As well as the partnership having guaranteed obligations to repay the bondholders, HBOS's rights to the assets are subordinated in the event of the bank becoming insolvent. The guarantee works similarly to a wrap, pledging payment of scheduled interest and principal to avoid risk of acceleration in the event of HBOS going bust. The bond trustee has an unsecured claim against the administrators of HBOS as well as a claim against the limited liability partnership. This matches a Pfandbriefe investor's claim to both the specific assets behind a deal and the rest of the bank's balance sheet.

International Financial Law Review's award winners are chosen for their contribution to legal innovation in the area of cross-border finance.