Shearman & Sterling advised Qxpress Pte. The SEC has generally indicated that CDSs, the most common type of derivative used in synthetic securitisations, are not self-liquidating financial assets. In May 2021 the ARRC selected CME Group as the administrator for forward-looking term SOFR rates, and in July 2021, the ARRC formally recommended CME Groups term SOFR rates. A place like Shearman & Sterling one of the elite international law firms. Vinson & Elkins awards some of the brightest law students from top law schools in the U.S. with Diversity Fellowships each year. As noted in 4.11 Activities Avoided by SPEs or Other Securitisation Entities, this has impacts on the Investment Company Act and Volcker Rule analysis. The issuer trust will typically issue notes to investors and trust certificate(s) to the depositor. Here, they give you a taste of what its really like as a trainee.. 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. Issuers of securities offered and sold in a registered offering, and issuers with assets in excess of USD10 million at fiscal year end and a class of securities (other than exempted securities) held by more than 2,000 persons (or more than 500 persons that are not accredited investors) may be subject to additional reporting requirements, including: Given that privately placed ABS are not likely to be so widely held that these requirements are triggered, they will, as a practical matter, only apply to securities sold in a registered offering. As a result, the ruling, if upheld on appeal, would allow the CFPB to proceed with an enforcement action directly against the Trusts for liability for actions undertaken by the Trusts servicers (on behalf of the Trusts) and not by the Trusts themselves. As is often the case in corporate seats, the hours can be unpredictable, particularly around closing, but small teams working on each deal meant great responsibility and ownership. Research forms a big part of trainee life in the corporate M&A group, which I hadnt expected from a transactional seat. provisions that require a poll, survey, or inquiries for quotes or information concerning inter-bank lending or deposit rates. SOFR compounded in advance, calculated by compounding interest over a set period of days. If its the international side of the firms work that youre keen on, then there arent many places youll find more of it than in international arbitration. In a recent matter, Shearman & Sterling advised NEOM Company on the cross-border financing of a $6.5 billion green energy facility between the UK and Saudi Arabia. In determining whether a transfer is a true sale or a disguised loan, courts look to a number of factors. The ARRCs recommendations suggested the use of a waterfall of fallback language to deal with the potential discontinuance or effective unavailability of LIBOR. imposing higher capital requirements on non-exchange-traded OTC derivatives. If the determining person does not select any non-LIBOR benchmark replacement, the benchmark replacement selected by the Federal Reserve will automatically replace the LIBOR rates in the contract. For example, a single-member limited liability company (LLC) is, for federal tax purposes, disregarded (in the absence of the SPE electing any contrary tax treatment) and therefore any transfer of assets from a parent to its wholly owned LLC will not be a taxable event. The ARRCs approach was not meant to be a binding directive, but merely an example of how an ABS product could be created using average SOFR. In a securitisation transaction it is common for tax counsel to provide an opinion addressing the tax treatment of the issued securities; in particular, whether the offered notes would be treated as debt securities for US federal income tax purposes. Admittedly, I had no idea what these terms meant going in, one trainee (reassuringly) quipped, but you learn so much as you go. In fact, trainees told us that through regular meetings, the firm was always transparent about what trainees could get involved in, which ranged from document management and helping with conditions precedent, to board minutes and one-on-one emails with clients and counsel. vertical risk retention by holding of at least 5% of each class of ABS interests issued; horizontal risk retention by holding junior most interests in an amount equal to at least 5% of the fair value of all ABS interests issued; and. in legacy contracts (including ABS transactions) that have adopted the ARRCs recommended fallback language; in business loans where transitioning from LIBOR to an overnight rate has been difficult; and. 2010 - dc. These recommendations, if adopted, could result in significantly higher capital charges for insurance company investments in CLO transactions. clarifying that the rules preempt any state or local law or standard relating to the selection or use of a benchmark replacement or benchmark replacement conforming changes. The accounting standards also include a discussion of various types of qualifiers and assumptions that are deemed not to be appropriate for accounting purposes. Shearman & Sterling has over 850 lawyers globally, speaking more than 75 languages. The SEC adopted amendments to Rule 15c2-11 that became effective in September 2021 to, among other things, provide greater transparency to investors and other market participants by requiring that information about the issuer and its security be current and publicly available before a broker or dealer can begin quoting that security. Shearman & Sterling is one of the worlds leading premier global law firms and was established over a century ago. The rules governing such entities will be a combination of: The primary factors driving the type and jurisdiction of the securitisation entity will be bankruptcy remoteness and tax. Exchange Act Rule 17g-5 divides conflicts of interest into two categories: As part of the conflict rules in 17g-5, an NRSRO is required to obtain a representation from the issuer, sponsor or underwriter of an asset-backed security that it will post on a real-time basis information any of them provides to any hired NRSRO in connection with the initial credit rating or subsequent credit surveillance to a password-protected website. in certain securitizations that hold underlying business loans or other assets that reference the SOFR Term Rate and where those assets cannot easily reference other forms of SOFR. 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. DaFa Properties Group Limiteds $100 million Senior Notes Offering. Vac schemers spend each week in a different department. In response to feedback from industry groups, the SEC issued a no-action letter in December 2021, which established a tiered set of compliance dates in an effort to allow brokers and dealers time to bring themselves into compliance. The Trust Indenture Act of 1939 is amended to provide that the right of any holder of any indenture security to receive payment of the principal of and interest on such indenture security shall not be deemed to be impaired or affected by any change occurring by the application of the LIBOR Act to any indenture security. Shearman & Sterling represented the dealer managers in connection with the exchange offer by Guangzhou Fineland Real Estate Development Co., Ltd. of any and all of its outstanding 13.5% senior notes due 2021 for 13.6% senior notes due 2023. Our Head Start programme is a one-day event specifically designed for First Year law students and Second Year non-law students looking for an introduction to City law. He regularly handles cross-border mandates. shortfalls in reserves or over-collateralisation; outstanding amounts exceeding applicable collateral borrowing value; delinquencies or charge-offs in excess of specified thresholds; and. To be best placed at the beginning of your legal career, you need to be in the best place. A place like Shearman & Sterling one of the elite international law firms. Trainees have shaped our success story and played a pivotal role in the firms growth. And its no surprise. Consequently, a key aspect of securitisations is to isolate the issuer and its assets from such bankruptcy risks by: As an alternative to a true sale structure, it is also possible to transfer exposure to the securitised assets using contracts that are protected against the most troublesome bankruptcy powers. Shearman & Sterlings commitment to client service was once again honored in the 2022 edition of Chambers USA. Generally, the opinion will describe the salient facts and analyse these facts in light of the factors identified by the courts as relevant to the true sale determination. In private deals, the investor vote required for certain actions is primarily a negotiated point, although in registered securitisations these requirements are more prescribed. Skyfame International Holdings Limiteds $112 Million Bond Offering. 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. events of default that give rise to a right to accelerate the transaction and exercise remedies, including the ability to enforce against collateral (sometimes with collateral sales being subject to additional consent requirements, unless a sale would generate sufficient proceeds to pay the secured notes in full). The New York Fed publishes daily SOFR and 30-, 90-, and 180-day SOFR averages, which are compounded daily on each business day. Benchmark replacement conforming changes are changes that the Federal Reserve determines would address one or more issues surrounding the replacement of the contracts benchmark, or (for non-consumer contracts) that are necessary or appropriate to implement the new benchmark in the reasonable judgment of the calculating person responsible for calculating that benchmark under the contract. Shearman & Sterling represented New Metro Global Limited in connection with its offering of $300 million 4.625% guaranteed senior notes due 2025, unconditionally and irrevocably guaranteed by Seazen Holdings Co., Ltd. Shinsun Holdings (Group) Co., Ltd.s Debut Senior Notes Offering. Chambers and Partners guides offer in-depth analysis of the legal market within countries and regions across the globe. The SECs enforcement authority and remedies for violations of the Risk Retention Rules would be the same as its general enforcement authority against those in violation of securities laws and regulations and their control persons, including permanent or temporary cease-and-desist orders, fines, withdrawal of registrations and restrictions on acting as officers or directors of SEC-registered companies, and otherwise may strip a person or entity of privileges afforded to registered persons. Come qualification time, third-seaters receive a list of teams who are looking to hire for that year. Shearman & Sterling LLP has a very efficient, reactive and knowledgeable team that is good fun to work with . for consumer contracts and most other contracts, SOFR (in place of overnight LIBOR) or term SOFR of the relevant tenor; for derivatives, 30-day average SOFR compounded in arrears (the SOFR rate used in the ISDA protocol); for certain contracts for which a Federal Housing Administration-regulated entity is a party, SOFR (in place of overnight LIBOR) or 30-day average SOFR (or, for Federal Home Loan Bank advances, the SOFR rate used in the ISDA protocol as described above); and. Shearman & Sterlings commitment to client service was once again honored in the 2022 edition of Chambers USA. The transaction documents typically include non-petition clauses that restrict involuntary bankruptcy filings against the issuer. Number of lawyers worldwide: 800+. The rules generally apply the following SOFR-based rates, plus the spread adjustment set forth in the statute: The rules otherwise largely mirror the statute, but with some clarifications, which include: release the creditors rights to excess collateral; allow additional debt to be secured by the collateral; transferring the securitised assets to the issuer in a perfected true sale; reducing the risk of the issuer becoming subject to involuntary or voluntary bankruptcy proceedings; and. At a base level, future trainees need a minimum AAB at A level and 2:1 degree. For those trainees hoping for the luck of the draw, the projects development & finance (PDF) seat is one plenty will have their eye on. Any person (including a determining person or calculating person) is protected from liability for: selecting or using a SOFR-based benchmark replacement selected by the Federal Reserve; implementing benchmark replacement conforming changes; or. 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