Mayer Brown is one of the leading law firms for SRT and ABS transactions in the US. What distinguishes your approach versus peers — and how do you maintain consistency and quality across the deals you work on?
Mayer Brown’s team stands apart by not only delivering technical solutions but immersing ourselves in our clients’ businesses. We take the time to understand how our clients operate, what drives their success, and where they are headed, enabling us to design strategies fully aligned with their commercial objectives.
We also pioneer first-of-their-kind transactions and translate ABS technology to emerging asset classes. We pair deep product knowledge with the largest and most sophisticated regulatory and licensing capabilities to deliver innovative structures that meet commercial objectives while withstanding regulatory, ratings, and investor scrutiny. With more than 35 dedicated regulatory lawyers and state licensing specialists supporting our transactional teams, clients rely on us for seamless execution across securitization, structuring, and compliance.
Finally, we collaborate constantly, share information quickly, and identify risks before they become problems, so our clients receive efficient and effective representation every time.
What is the most complex crossborder SRT and ABS deal you executed this year, and what legal or regulatory challenges did you solve that others could not?
We represented PayPal, the world’s largest buy-now-pay-later lender, in a first-of-its-kind committed forward flow sale transaction. Funds managed by Blue Owl Capital have been committed to purchase approximately $7bn of BNPL receivables originated by PayPal in the US, while PayPal will retain responsibility for all customer-facing activities, including underwriting and servicing, associated with its US Pay in 4 BNPL products. This was a highly sophisticated financing structure in a sector under heightened regulatory and market scrutiny.
On the SRT side, we advised Oaktree Capital Management (United States) in its investment in a significant risk transfer transaction with Deutsche Pfandbriefbank (pbb) (Germany), a leading specialist bank for commercial real estate financing. Oaktree wrote protection on an approximately $320m mezzanine tranche of pbb’s performing US portfolio, which had an aggregate volume of about $2bn and mainly comprised office loans, through Oaktree’s subscription to an interest-bearing, secured credit-linked note issued by pbb. The transaction supported pbb’s strategic exit from the US market and showcased Oaktree’s ability to design and fund bespoke capital solutions for commercial real estate exposures.
Recent regulatory developments in the US are accelerating adoption and expanding the strategic relevance of SRT transactions. How are you positioning yourself for more opportunities?
Mayer Brown remains at the centre of the most consequential US bank regulatory capital developments affecting SRT. When the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation reproposed the Basel III capital rulemakings, our team advised banks, investors, and leading trade associations on the proposals’ practical effects, including their potential impact on securitizations and synthetic risk transfers. We helped shape the dialogue on how US capital rules should recognize bona fide risk transfer and preserve the availability of credit to consumers, businesses, and real estate markets.
What role is Mayer Brown playing in the shift toward SRT for non-bank lenders, private credit funds, and insurance linked structures?
Mayer Brown is the only global law firm that represents SRT investors and issuers in roughly equal measures. This balanced perspective is especially appealing to emerging classes of SRT investors, including those using insurance-linked structures, because they know we understand both sides of the table and can pivot quickly to negotiate terms that best protect their interests.
Additionally, Mayer Brown has a market-leading insurance regulatory practice that has been deeply integrated in SRT deals for years. Even before the advent of insurance-linked structures, our insurance lawyers were advising on product classification and licensing risks for SRT investors, making it natural to advise insurers on the latest structures for acquiring exposure to high-quality, bank credit risk.
What risks will most affect SRT and ABS transactions in the next two to three years, and how are you preparing clients?
The largest risks to SRT come from the economic cycle. If banks that have already issued SRTs are unable to remain in the market for new deals at competitive prices, they will fulfil the rollover risk fears of sceptics. Already we see European regulators scrutinizing their banks for what they view as potentially excessive reliance on SRT. If investor demand for SRT disappears, there could be a return to issuance limits in the US and longer approval times in Europe. We are preparing clients for this risk by emphasizing the adaptable features of SRT deals. For banks this means constantly refining deal documents to include more flexible terms. These terms can easily be rolled back in subsequent issuances to pique investor demand.
On ABS, we believe regulatory variability across US states will remain a core structuring issue for issuers and investors. That means building more asset-class-specific regulatory diligence into transactions, stress-testing bank partnership and licensing theories, focusing carefully on state-law developments and enforcement trends, and ensuring that disclosure, reps, triggers, and servicing mechanics reflect the most likely regulatory pressure points.
We are also advising market participants to monitor the interaction between ABS structures and bank regulatory capital and liquidity developments, including Basel III-related capital requirements and expected changes to bank liquidity rules, because those changes could affect bank participation, financing costs, collateral demand, and execution across the ABS market. While the changes to bank capital and liquidity requirements will be finalized and implemented over the next couple of years, market participants will immediately begin to develop new structures and align their business objectives in line with these changes.