Structured Transactions

Our team has broad experience in representing issuers, initial purchasers, placement agents, collateral managers, and equity investors in collateralized loan obligation (CLO) and collateralized debt obligation (CDO) transactions. In fact, our lawyers are considered pioneers in this space, combining ingenuity with the practical application of the law to develop sophisticated solutions for clients looking to create liquidity by helping lenders pool and sell commercial loans to investors.

Our lawyers are diligent and responsive as we partner with our clients to help them achieve success in this competitive environment. We seek to leverage our extensive execution experience to provide our clients with insight on market trends, creative ideas to address new issues, and practical legal advice. Our knowledge of the regulatory landscape, including banking, investment management, and securities law, and our involvement with leading industry groups, allows us to provide insightful guidance on legal issues of the day.

We routinely advise bank arrangers and collateral managers on CLO transactions ranging from the warehousing stage to closing and thereafter on a variety of refinancing (including reset) and “call and roll” transactions. Our experience includes broadly syndicated and middle market CLOs, both actively managed and static. Our deals have included the most innovative, cutting-edge features of CLO technology, and have also applied CLO structures to securitizations of other types of debt instruments.

Effective representation of clients in CLOs also requires proficiency in the highly specialized areas of ERISA, Uniform Commercial Code (UCC), and bankruptcy law, EU Securitisation Regulation, and tax. Our team has dedicated support in each of these areas from Morgan Lewis lawyers who are widely recognized as thought leaders in their respective fields, but also have detailed knowledge about our transactions.

Our lawyers have a long history of representing some of the world’s leading players in the fintech sector. We work with fintech platforms, financial institutions, investors, and other market participants in connection with the following types of transactions and representations:

• Securitization and other financing and monetization of unsecured consumer loans and commercial loans
• Capital markets transactions, including forward-flow arrangements, warehouse financing facilities, and securitization facilities and issuance platforms
• Asset-based lending and bridge facilities for interim financing of receivables and other assets
• Structuring and establishment of acquisition finance facilities for various types of financial assets
• Regulatory and other corporate finance transactional matters relating to esoteric assets and fintech platform issues

We have represented companies using innovative or disruptive technologies including the following:

• Loan trading platforms
• Peer-to-peer/marketplace lending platforms
• Payment systems
• Ride-sharing platforms
• Alternative mortgage and real estate financing products
• Solar and other renewable energy system loans

We have been involved in marketplace lending since the beginning. As the asset class has evolved we have represented all types of participants, including the following:

• Platform sponsors
• Loan sellers
• Loan buyers
• Warehouse lenders
• Warehouse borrowers
• Sponsors
• Underwriters
• Investors

Our top-tier structured transactions team has broad experience representing borrowers and lenders—including regulated and nonregulated financial institutions, bank-sponsored asset-backed commercial paper conduits, funds, and asset managers—in a variety of warehouse lending structures across multiple asset classes.

We have been advising on warehouse lending structures for decades and are considered pioneers in this space, combining ingenuity and keen commercial sense with the practical application of the law to develop sophisticated solutions for clients providing or seeking leverage. Our US and UK lawyers work on cross-border transactions with assets in the United States, the United Kingdom, across Europe, and other jurisdictions. We have closed hundreds of transactions that aggregate billions of dollars of collateral.

In the asset-backed market, we have handled numerous collateral types such as unsecured consumer loans (including marketplace loans), auto and equipment loan and lease receivables, dealer floorplan loans, small business loans, credit and charge card receivables, student loans, mobile phone equipment installment plan receivables, telecom service and equipment receivables, home improvement loans, solar energy system loans, healthcare receivables, powersport/boat/RV loan receivables, insurance premium receivables, loans relating to marine assets, trade receivables, shipping container leases, vehicle fleets, government guaranteed loans, and other esoteric assets.

In the mortgage-backed market, we have worked on warehouse and repurchase facilities with the following types of mortgage collateral: performing, nonperforming, agency, nonagency, nonqualified, jumbo, fix-and-flip, and small balance commercial loans. In addition, we have advised facilities on commercial mortgage loans, mortgage-backed securities, commercial mortgage-backed securities, servicing rights, servicer advance receivables, single-family rental loans and properties, lease-to-own loans, and other financial assets. These transactions include traditional warehouse lending arrangements, repurchase and gestation purchase agreements, early buyout facilities, term loan and revolving credit facilities, participation structures, syndicated facilities, and back-to-back repurchase agreements.

In the collateralized loan market, we have represented arrangers, managers, and equity investors in various types of warehouse lending arrangements for aggregating assets prior to a CLO transaction, including advising arranger clients on sophisticated back-to-back financing arrangements for warehouse structures.

We also have a deep understanding of warehouse lending in connection with mortgage loans sold to Fannie Mae, Freddie Mac, Ginnie Mae, and the Federal Home Loan Banks, as well as private-sector market participants, and we have worked with most of the major custodians, servicers, and account banks in closing these deals. Our team also has played a key role in developing tools that blend the discipline of bank lending documentation with the more standardized Securities Industry and Financial Markets Association forms.

To ensure a smooth closing, we coordinate the work of lenders, borrowers, buyers, sellers, servicers, swap counterparties, trustees, account banks, custodians, and other participants. If a transaction encounters difficulties or does not perform as planned, we work closely with our litigators and bankruptcy and restructuring lawyers to help our clients anticipate potential outcomes and protect their interests.

We partner with warehouse lenders to build new programs from the ground up, developing form repurchase documentation, working with regulatory, legal, and credit teams, and then closing multiple facilities based on the form. We also structure and establish warehouse facilities that allow for refinancing and term capital markets securitization take-out transactions, providing borrowers with the flexibility to finance assets using various tools and structures depending on market conditions. We have a keen grasp of the tax, bankruptcy, and commercial law issues that must be addressed and how various facilities can be used to diversify funding sources.

Our multidisciplinary approach involves working with our finance and restructuring lawyers to insulate transactions from insolvency risk. We consult with our structured finance tax lawyers to develop and implement tax-efficient structures and we partner with our litigation and restructuring teams to help guide borrowers and lenders through strategic alternatives when defaults, waivers, and modifications arise. We also work with our traditional commercial lending and asset-based lending teams if their experience may be valuable to our client’s needs.

Our team has handled numerous collateral types such as unsecured consumer loans (including marketplace loans), auto and equipment loan and lease receivables, dealer floorplan loans, small business loans, credit and charge card receivables, student loans, mobile phone equipment installment plan receivables, telecom service and equipment receivables, home improvement loans, solar energy system loans, healthcare receivables, powersport/boat/RV loan receivables, insurance premium receivables, loans relating to marine assets, trade receivables, shipping container leases, vehicle fleets, government guaranteed loans, and other esoteric assets.

Our mortgage finance team advises on warehouse and repurchase facilities with the following types of collateral: performing, nonperforming, agency, nonagency, nonqualified, jumbo, fix-and-flip, and small balance commercial loans. In addition, we advise facilities on commercial mortgage loans, mortgage-backed securities, commercial mortgage-backed securities, servicing rights, servicer advance receivables, single-family rental loans and properties, lease-to-own loans, and other financial assets. These transactions include traditional warehouse lending arrangements, repurchase and gestation purchase agreements, early buyout facilities, term loan and revolving credit facilities, participation structures, syndicated facilities, and back-to-back repurchase agreements.

We also have a deep understanding of warehouse lending in connection with mortgage loans sold to Fannie Mae, Freddie Mac, Ginnie Mae, and the Federal Home Loan Banks, as well as private-sector market participants, and we have worked with most of the major custodians, servicers, and account banks in closing these deals. Our team also has played a key role in developing tools that blend the discipline of bank lending documentation with the more standardized Securities Industry and Financial Markets Association forms.