Lovells have been advising the receivers of Rhinebridge Plc (in receivership), a $0.9bn SIV, on its Goldman Sachs-led restructuring announced on 16 July 2008.
As already announced, Lovells has also been advising the receivers of SIV Portfolio Plc (in receivership) (formerly known as Cheyne Finance plc).
On 16 July 2008, Neville Kahn, Nicholas Edwards and Nicholas Dargan, partners at Deloitte & Touche LLP (the Receivers) receivers of Rhinebridge Plc (in receivership) (the SIV vehicle) announced that the SIV vehicle had entered into a restructuring agreement and a portfolio sale agreement with Goldman Sachs International (GSI). Under the restructuring arrangements, the SIV vehicle has agreed to sell a portion of the portfolio of debt securities held by it to GSI and further debt securities will be sold to market participants pursuant to an auction process. As part of the restructuring, certain senior creditors have also agreed by private contract to purchase a proportion of the debt securities equal to the proportion of senior obligations owed to such a senior creditor by the SIV Vehicle (a vertical strip).
The Rhinebridge deal follows last month's announcement that a groundbreaking deal had been struck in relation to SIV Portfolio Plc (in receivership) (formerly known as Cheyne Finance plc). Commentators suggested that the high profile deal represented a blueprint for the restructuring of other SIVs to follow. The launch of the Rhinebridge deal further demonstrates the potential of the blueprint to be a flexible solution for other SIVs by incorporating new features such as the vertical strip.
The Rhinebridge team at Lovells was led by Robin Spencer (Partner and Head of Business Restructuring and Insolvency (BRI)), David Hudd (Partner, Global Head of Finance), and Andrew Carey (Partner and Head of the London Capital Markets practice). The BRI team included Caroline Rasaiah (Senior Associate). The Capital Markets team included Natasha Williams (Senior Associate, Capital Markets) and Jennifer O'Connell (Associate, Capital Markets). Kit Johnson (of counsel and head of the firm's corporate trustee practice) led the team advising The Bank of New York Mellon (BNYM) as security trustee for Rhinebridge plc (in receivership). Regulatory advice was led by Dominic Hill (Partner). The U.S. law team was led by Robert Ripin (Partner, Capital Markets) and Adam Solowsky (Of Counsel, Capital Markets) and litigation by Hugh Lyons (Partner) and John Tillman (Senior Associate). Clifford Chance partner David Steinberg has been advising GSI on the transaction.
In addition to our work on the Cheyne and Rhinebridge SIVs, Lovells is also representing BNYM as security trustees of a number of SIVs including Mainsail II Limited (in receivership) and Golden Key Limited (in receivership).
Through these mandates Lovells has demonstrated a market-leading position in complex financial restructuring and developed a unique expertise in this field.
Andrew Carey said:
"Our involvement in this second high profile transaction further demonstrates that the Lovells team is continuing to lead the way in representing receivers on and security trustees on SIV restructurings."
A SIV is an investment company which seeks to generate investment returns through a yield arbitrage between on the one hand, investments in highly-rated medium- and long-term fixed income instruments (including residential mortgage-backed securities (RMBS) and collateralised debt obligations (CDOs) and on the other hand, the funding of such investment by the issuance of lower cost short-term debt instruments in the form of asset-backed commercial paper (ABCP) and asset-backed medium term notes (MTNs). Typically, capitalisation of a SIV includes subordinated debt (Capital Notes) which take the first-loss position on the underlying investment portfolio.
Several SIVs have seen the market value of their underlying investments deteriorate under hostile market conditions, with RMBS and CDO assets particularly affected.
Lovells' Business Restructuring and Insolvency group
Business restructuring and insolvency has been one of Lovells' core fields of work for more than 60 years. Our clients include banks, other financial institutions, financially distressed companies, insolvency practitioners and turnaround specialists from all the major accountancy firms, investment banks and specialist advisory institutions, as well as creditors and directors of companies in financial difficulty.
Lovells' Capital Markets group
Lovells' capital markets practice has dedicated lawyers in all of the major financial centres and provides a full service to our clients by combining the skills of our English and US lawyers with local expertise across our international network. Our lawyers are ideally placed to advise on all capital markets activities from securitisations (including CDOs and project bonds), repackagings, credit derivatives and debt securities offerings (including programmes and bank subordinated debt qualifying as regulatory capital) to international equity and equity linked offerings and equity derivatives. We regularly act for arrangers, managers, issuers and trustees
Lovells' Trustee Practice
The Lovells' Trustee Practice offers quality legal services to trustees, agents and transaction service providers across the whole range of capital markets and structured debt products. We are the market leading practice for advising trustees in relation to distressed structured finance transactions.
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With over 3,000 people operating from 26 offices in Asia, Europe and the United States, Lovells is one of the world's leading international law firms. We advise many of the world's largest corporations, financial institutions and governmental organisations. We regularly act on complex, multi jurisdictional transactions as well as some of the most high profile commercial disputes. Lovells (the "firm") is an international legal practice comprising Lovells LLP and its affiliated businesses. Lovells LLP is a limited liability partnership registered in England and Wales with registered number OC323639. Registered office and principal place of business: Atlantic House, Holborn Viaduct, London EC1A 2FG.
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