Lawyers in the Structured Finance Group of Skadden, Arps, Slate, Meagher & Flom LLP and affiliates (“Skadden, Arps” or “Skadden”) advise underwriters, issuers, investors and credit enhancers on the securitization of financial assets — such as credit card receivables, automobile installment loan contracts, commercial loans, mortgages, debt securities, derivatives and trade receivables. Skadden continues to represent clients in offerings that set precedents in this rapidly expanding field.
Our structured finance attorneys are experienced in general corporate, corporate finance, securities law, corporate restructuring, real estate, derivatives, banking and tax-related matters. The group regularly utilizes the extensive experience of lawyers in other practice areas such as Bank Regulatory, Corporate Restructuring, Banking, Investment Companies, UCC and Secured Transactions, Insurance, Blue Sky and ERISA.
Skadden’s Structured Finance practice is the most diverse on Wall Street, having done more innovative securitization transactions than any other firm. The practice has been widely recognized, including by Chambers USA and Legal 500, which acknowledges the group’s “trailblazing work in both securitization and derivatives” and highlights its involvement in first-of-their-kind transactions.
Asset-Backed Securities
Skadden represents underwriters, issuers, investors and credit enhancers in a broad range of asset-backed securities offerings. These include public, private and overseas issuances of asset-backed notes, asset-backed certificates, asset-backed commercial paper and other instruments.
The firm has acted as counsel in a number of “first time” asset-backed offerings. We represented J.P. Morgan Securities and Ford Motor Credit Company in the first securitization of retail automobile operating leases; Sallie Mae in the first securitization of student loans by a “government sponsored entity;” The First Boston Corporation (now Credit Suisse First Boston) in the creation of the first “master trust” credit card facility — for The First National Bank of Chicago; the placement agents in the first cash flow collateralized bond obligation (“CBO”) transaction and the placement agent in the first market value CBO transaction; the underwriters in the first securitization of standing timber for Pacific Lumber Company; Salomon Brothers Inc in the first securitization of utility conservation tariffs for Puget Sound Power & Light Company; Credit Suisse First Boston in the first securitization of project finance loans; and Union Bank of Switzerland in the acquisition and securitization of the telephone leasing business of Lucent Technologies.
Skadden has extensive experience in the securitization of “traditional” asset classes. For example, in credit card securitizations, the firm has been involved in transactions for, among others: Chase Manhattan Bank, First USA, MBNA, The First National Bank of Chicago, NationsBank, Circuit City, Partners First, Bank of America, Wachovia Bank, J.C. Penney Co., Sears, Roebuck & Co., Federated Department Stores, Metris Companies, Fingerhut Companies and Target Corporation. In auto receivables, Skadden, Arps has worked on transactions involving Ford Motor Credit, DaimlerChrysler, Mitsubishi Motors, Honda, Nissan, World Omni, BMW and others.
The firm has recently been involved in a number of commercial loan securitizations for, among other commercial banks, National Westminster Bank, Credit Suisse First Boston, Fleet Bank, Chase Manhattan Bank, Sumitomo Bank and Bank of Tokyo-Mitsubishi.
We have represented both underwriters and collateral managers in cash flow and market value CBO offerings. The firm’s clients in this area have included, among others, Morgan Stanley, Goldman, Sachs & Co., CIBC Oppenheimer, Salomon Smith Barney, J.P. Morgan Securities, Bankers Trust Company and Donaldson, Lufkin & Jenrette.
Skadden lawyers have worked on asset-backed securities offerings for both U.S. and non-U.S. originators. For example, we represented Goldman, Sachs in the first securitization of Japanese retail auto loans through a rated capital markets offering for Nippon Shinpan.
We have assisted in structuring securitizations involving a wide variety of assets. In addition to transactions involving traditional assets such as automobile installment loan contracts, credit card receivables, home equity loans and trade receivables, we have advised on issuances involving the securitization of equipment leases, commercial loans, student loans, truck loans, farm equipment loans, franchise contracts, movie and television syndication contracts, and on repackagings and resecuritizations of asset-backed securities, REIT debt, mezzanine debt and other securities. The firm has recently assisted in the structuring of a number of innovative transactions in which insurance or reinsurance was provided through the capital markets, such as the “catastrophe bond” transactions for United Services Automobile Association, the weather derivative transaction for Koch Industries, Inc. and the mortgage pool insurance transactions for Freddie Mac.
The firm has recently assisted in the structuring of financings designed to give insurance companies access to the capital markets. The transactions involve the issuance by a special purpose vehicle of notes backed by funding agreements issued by the insurance companies. Programs have been established for John Hancock, Allstate, Principal, Nationwide and New York Life.
The firm has also assisted investment banking firms and U.S. and non-U.S. banks in establishing “conduit” companies to securitize trade receivables, commercial loans, credit card receivables, auto receivables, consumer debt obligations and other financial assets originated by numerous lenders.
Skadden also has experience in the use of various types of derivatives in connection with asset-backed securities issuances, including interest rate and currency swaps, total return swaps, credit-linked notes and default swaps and options. The firm has represented investment banks in the establishment of trusts and corporate entities that issue securities, acquire assets or asset-backed securities, and enter into derivative arrangements.
Mortgage-Backed Securities
Skadden handles a wide variety of mortgage-related transactions, including collateralized mortgage obligations; multiclass pass-through certificates, both REMIC and non-REMIC; single issuer/developer commercial mortgage loan transactions; pooled single-family, multifamily and commercial mortgage loan transactions; “strip” transactions; senior/subordinated transactions; triple-net lease securitizations; and transactions involving sub-performing and nonperforming single-family, multifamily and commercial mortgage loans and the real estate itself.
The firm has been involved in numerous single-class and multiclass private single issuer/developer transactions, including those involving mortgage loans on office buildings, shopping centers, multifamily apartment buildings, health care properties, restaurant franchises and strip centers. We also have completed many transactions in a pooled and “mini-pooled” format with these assets.
Many of the firm’s mortgage-related transactions have involved swaps and other derivative arrangements. We have also been involved in developing new products in the single family and commercial mortgage loan arenas, including the creation of a securitization vehicle for “shared appreciation mortgages,” a vehicle for investing domestically in Canadian dollar denominated commercial mortgage loans and a commercial mortgage loan collateralized bond obligation transaction.
