Any Exchange Act violation could also result in equitable remedies, including the right of rescission. who circulates opportunities weekly via email. Here, they give you a taste of what its really like as a trainee.. The project development side covers projects-related M&A in sectors like energy, mining and transportation, with the project finance wing overseeing the financing of infrastructure projects in these sectors through their entire life cycle. The number of independent directors should be at least equal to the minimum number of members or partners required to continue the SPEs existence. IFC Issues First Housing Bond in Bangladesh. Shearman & Sterling continues to garner recognition in the 2023 edition of Chambers UK receiving 35 rankings in the new edition, including 13 practice and 22 individual rankings. The firms global presence and deep understanding of its clients' businesses and the industries they operate in, drives the firms work to provide outstanding legal service and commercial advice. This takes place with either a senior associate or a partner and a member of the graduate recruitment team, and isn't too formal, according to Gascoyne. the transferor being a debtor of the transferee on or before the purchase date; the transferors ability to extinguish the transferees rights in the transferred assets by payments or repurchase by the transferor or from sources other than collections on the asset; and. First, SOFR is an overnight rate, while LIBOR has been available in many different tenors (eg, one month, three months) and is forward looking. As a global, elite law firm, Shearman & Sterling represents many of the worlds leading corporations and major financial institutions, as well as emerging growth companies, governments and state-owned enterprises, on ground-breaking, precedent-setting matters. The calendar year 2023 also should see a continued focus on the transition from the use of the London Interbank Offered Rate (LIBOR) to the Secured Overnight Financing Rate (SOFR). Registered rating agencies, referred to as NRSROs, are regulated by the SEC. These are typically used in dealer floor plan securitisations and credit card securitisations. Shearman & Sterling Apply now The Legal Cheek View New York heavyweight Shearman & Sterlings finances have returned to form, with an 18% jump in global revenue to $1.01 billion US Summer Program. The Volcker Rule discussed below has made it less attractive for securitisation SPEs to rely on Section 3(c)(7), although the exemption is still relied on by actively managed CLOs. The trainees we spoke to let us know that the majority of trainees want to qualify into M&A and finance but of course teams cant facilitate everyones wants. The firm didn't disclose its 2022 retention figures. SPEs established as single-member LLCs or Delaware statutory trusts can be readily structured to avoid entity-level tax. Hi all, Anyone had any experience with these guys? With approximately 850 lawyers in 25 offices Business Services. Partnerships and entities treated as partnerships are also generally treated as pass-through entities for tax purposes, depending on the number of partners, the trading activities in any equity (or securities deemed to be equity for tax purposes) in such partnerships and the availability of relevant safe harbours. Any state laws relating to the selection of a benchmark replacement or limiting the manner of calculating interest (insofar as such a provision applies to the selection or use of a benchmark selected by the Federal Reserve or benchmark replacement conforming changes) are pre-empted. The extent to which regulators will address securitisation industry feedback on rules that are not yet final remains to be seen. The derivatives underlying such securitisation are regulated by the SEC if they reference a single security, a single loan or a narrow-based security index and by the CFTC if they are deemed to be swaps (in which case the SPE may also be a commodity pool). 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. 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. 9 Appold Street, Broadgate West, London, Greater London, UK, EC2A 2AP, 300 West 6th Street, Suite 2250, Austin, Texas, USA, 78701, 2828 North Harwood Street, 18th Floor, Dallas, Texas, USA, 75201, Bank of America Tower, 800 Capitol Street, Suite 2200, Houston, Texas, Houston, Texas, USA, 77002, 1460 El Camino Real, 2nd Floor, Menlo Park, California, USA, CA 94025-4110, 535 Mission Street, 25th Floor, 94105, San Francisco, California, USA, 401 9th Street, NW, Washington, DC, District of Columbia, USA, DC, 20004-2128, Authored by Michael Dorf, Cody Wright, Robert J Cardone, Cassandra Cuellar, Authored by Lorna Xin Chen, Anil Motwani, Ji Zhang, Litigation: White-Collar Crime & Government Investigations, California: San Francisco, Silicon Valley & Surro, Litigation: General Commercial: Highly Regarded, 599 Lexington Avenue, New York, New York, USA, NY 10022-6069. 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. For example, the CFTC has issued no-action letters exempting from the definition of commodity pool certain securitisation entities that are operated consistent with SEC Regulation AB or Investment Company Act Rule 3a-7. Those rules, which were proposed in July 2022 and adopted in December 2022, will become effective 30 days after their publication in the Federal Register. Osaka Gas USAs Joint Development of Utility-Scale Solar Projects with Oriden in the US. Investors in unfunded ABS tranches will typically have contingent funding obligations and may be required to provide additional credit support or face replacement if their credit drops below agreed levels. OGUSA's Joint Venture with MHI Group to Acquire Brighter Future Solar Farm. To the extent such securitisations are registered, they must comply with the Reg AB II requirements described in 4.1 Specific Disclosure Laws or Regulations, and otherwise the general disclosure requirements described in 4.2 General Disclosure Laws or Regulations apply. The primary investor protections follow from the general and specific securities laws described in this chapter. A guide to legal practice areas. In all matters, Shearman & Sterling is dedicated to serving clients at the highest level. Opportunities for First- and Second-Year Law Students. Black Spade Acquisition Cos $169 Million SPAC US IPO. Everyone has taken the time to speak to me and help., There are two trainee socials per seat (one financed by the firm and the other by the trainees themselves), whether thats going to a bar, doing activities or just grabbing some food. There were also some more informal drinks invites from partners, something trainees praised: Chatting in a social setting with higher-up members of the firm is really nice., Starting in 2022, trainees and associates are expected to be in the office on Tuesday, Wednesday and Thursday, working remotely for the remainder of the week. pleb1. In a recent case, Shearmans international arbitration group represented Swiss bank EFG in a dispute over the banks alleged participation in a fraudulent scheme that resulted in the bankruptcy of an insurance company in Taiwan.. Firm Overview:Shearman & Sterling has a long and distinguished history of supporting its clients wherever they do business, from major financial centers to emerging and growth markets, for nearly 150 years. Shearman & Sterling represented the initial purchasers in connection with Sunac China Holdings Limited's offering of $400 million 6.8% senior notes due 2024 and tap offering of $100 million 6.5% senior notes due 2026. Banks are highly regulated entities and are also subject to a separate insolvency regime compared to other entities, and are therefore not eligible for bankruptcy protection. The proposed rules would also prohibit private fund advisers from engaging in certain compensatory and other practices which have the effect of creating conflicts of interests between private funds and their advisers. In determining whether a transfer is a true sale or a disguised loan, courts look to a number of factors. Skyfame International Holdings Limiteds $100 million Senior Notes Offering. only hold derivatives for uses permitted under Regulation AB, such as credit enhancement and the use of derivatives to alter the payment characteristics of the cash flow. Consequently, the traditional means of addressing the Volcker Rule have been to avoid relying on any of these exemptions. provisions that require a poll, survey, or inquiries for quotes or information concerning inter-bank lending or deposit rates. The opinion will usually identify these key factors and draw a conclusion based on the overall analysis and reasoning in the opinion letter. In 2021, Shearman interviewed students from over 30 law schools both on campus and through job fairs. Another tax issue that arises in connection with the use of foreign SPE issuers that are treated as corporations for US federal tax purposes is whether the SPE is engaged in a US trade or business for US federal income tax purposes. For example, an opinion assuming that the transfer is a true sale for accounting purposes would have to carve out the legal isolation analysis from such assumption. The case is currently stayed and briefs have been filed, including an amicus curiae brief filed by the Structured Finance Association in support of the Trusts position. Theres plenty of room for pro bono work at Shearman too, with a dedicated pro bono point person (shoutout to Nina!) Certain types of LIBOR fallback provisions will be disregarded: provisions that base the LIBOR replacement in any way on a LIBOR value, except to account for the difference between LIBOR and the benchmark replacement; and. Shearman & Sterling advised Citigroup Global Markets Ltd. as the global coordinator, sole bookrunner and representative of the underwriters of the initial public offering of Black Spade Acquisition Co of 16,900,000 units at an offering price of $10 per unit on the New York Stock Exchange. Shearman & Sterling represented the initial purchasers in connection with Skyfame International Holdings Limiteds offering of $100 million 13% senior notes due 2023, unconditionally and irrevocably guaranteed by Skyfame Realty (Holdings) Limited. For example, this can be done by using a tax-transparent organisational form or by incorporating the SPE in a jurisdiction that does not impose such taxes. In addition to driving value for clients, the data system also provides powerful predictive insights to help clients achieve their business goals. Until recently, Rule 15c2-11 has always been understood by market participants to apply only to equity securities. The servicing provisions generally relate to continued collection and servicing of the relevant asset and typically include a number of provisions relating to reporting, notice and turnover of collections. The nature of the CDS may also impact the Investment Company Act analysis for the issuer. Interest paid or accrued by a typical securitisation SPE to a foreign person will subject to the satisfaction of certain requirements relating to the investors US activities and equity or control person relationship with the SPE and related persons usually be exempt from withholding tax by virtue of falling within the portfolio interest exemption from withholding. General banking rules may also come into play when structuring a bank-sponsored securitisation, such as restrictions on affiliate transactions set forth in Sections 23A and 23B of the Federal Reserve Act and the implementation thereof set forth in Regulation W. Organisational Forms of SPEs Used in Securitisations. with respect to transactions where the underlying pool assets bear floating rates, a transition of a specified percentage of those assets from LIBOR based to adjusting using an alternative index. The Federal Deposit Insurance Act (FDIA) provides the bank regulatory agencies with broad enforcement powers against individuals and entities for violation of the applicable banking laws and regulations, including the Risk Retention Rules. In addition, the CFTC has anti-avoidance authority to treat as swaps transactions that are wilfully structured to evade the requirements of the DoddFrank Act and to bring enforcement actions where such transactions fail to satisfy applicable criteria. As outlined earlier, common law trusts are disfavoured compared to statutory entities for bankruptcy-remoteness purposes in light of the separate existence afforded to such statutory trusts. As such, the TBA market permits lenders to lock in rates for mortgages before they are originated, which, in turn, allows borrowers access to lower, locked-in rates. 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. Appointing an independent director whose fiduciary duty runs to the SPE and not to its shareholders, and employing an entity type that allows for such redirection of fiduciary duties, reduces the risk of a filing for the benefit of its shareholders. Shearman & Sterling has a distinguished history of supporting clients wherever they do business, from major financial centres to growing markets. requiring clearing of standardised OTC derivatives through regulated central counterparties; requiring trading of standardised transactions to occur on exchanges or electronic trading platforms when appropriate; increasing transparency through regular data reporting; and. In March 2022, the SEC proposed a set of cybersecurity disclosure rules for public companies. Duddell Street Acquisition Corp.s Business Combination with FiscalNote Holdings, Inc. Shearman & Sterling represented Citigroup Global Markets Inc. and J.P. Morgan Securities LLC in connection with Duddell Street Acquisition Corp. (Duddell Street)'s business combination with FiscalNote Holdings, Inc. (FiscalNote). An issuers most recent annual report filed under the Exchange Act or, for an issuer that has not yet filed an annual report, the prospectus from its registration statement under the Securities Act of 1933 (Securities Act), together with any subsequent Exchange Act periodic reports, suffices. The independent director(s) also provide(s) important protection against dissolution of the SPE, in part by requiring such a directors participation in a dissolution decision, and in part by providing that such independent director becomes a springing member or springing partner if the absence of a member or partner would cause dissolution. there is a signed agreement that reasonably identifies the relevant rights and assets. The firms success is built on its clients success. If a debtor becomes subject to bankruptcy proceedings, creditors will, with some exceptions, be automatically stayed from collecting and enforcing against the debtor and any posted collateral. Jay Singer is noted for his strength in structuring tax-efficient corporate transactions. In addition, the GSEs issue some risk transfer securitisations that are not guaranteed. It is important to note that the issue before the Third Circuit is whether the Trusts are indeed covered persons and thus could be vicariously liable for the conduct of their agents, the servicers. Registered investment companies are subject to leverage and capital structure requirements that are incompatible with a securitisation. daily simple SOFR in arrears, calculated using simple interest over the current interest period; SOFR compounded in arrears, calculated by compounding interest over the current interest period; and. Open-market CLOs will not be subject to US risk retention requirements, as discussed in 4.3 Credit Risk Retention. 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. Follow Shearman & Sterling on Instagram and LinkedIn. Enforcement and Penalties for Non-compliance. DAVID SCHEFFER, former U.S. To address some of the legacy deal issues, at the recommendation of the ARRC, in March 2021 the New York State legislature passed new legislation that provided a statutory remedy to these problems. Delaware statutory trusts (DSTs) and Delaware limited liability companies (DLLCs) are often the entities of choice for securitisations. When trainees are working those longer hours, theres a 30 allowance for deliveries and taxis. There may also be additional representations relating to the nature and characteristics of the relevant assets. satisfaction of specified eligibility criteria when sold; all required consents and authorisations having been obtained; various additional tailored representations. Applicable tax laws may also cause debt instruments to be characterised as equity interests for purposes of that determination. 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. Many existing securitisations provide that if LIBOR is terminated or ceases to function, the applicable interest rates may become fixed based on the last LIBOR available. Logically, issuers of ABS offered under another exemption could undertake to make Rule 144A information publicly available and therefore enable those securities to be quoted under the last option above. Delaware is viewed as a favourable jurisdiction for forming business entities. In the UK Apply today at CareerBuilder! The offering of securities in a synthetic securitisation will be governed by the Securities Act. For most securitisations, risk retention may take any of three standard forms: The person required to retain the risk is the sponsor, defined as a person who organises and initiates an asset-backed securities transaction by selling or transferring assets, either directly or indirectly, including through an affiliate, to the issuer, a phrase that is substantially identical to the definition of sponsor under Regulation AB. This structure is typically used in auto lease securitisations and other lease transactions relating to titled goods. Shearman & Sterling advised IFC on the first housing bond issued in Bangladesh, provided to BRAC Bank Limited. Shearman & Sterling represented the initial purchasers in connection with Skyfame International Holdings Limiteds offering of $112 million 13% senior notes due 2023, unconditionally and irrevocably guaranteed by Skyfame Realty (Holdings) Limited. 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. disclosure requirements for communications with rating agencies, which, among others, require all information provided to hired Nationally Recognized Statistical Ratings Organizations (NRSROs) in relation to the initial credit rating or any ongoing credit surveillance to be posted to a password-protected website, referred to as the 17g-5 website. If a credit event occurs under a CDS, then the SPE will fund its payment obligation with proceeds from the permitted investments. 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. The firms success is built on its clients success. The rights of a purchaser of such assets attach if: Although it is possible for a security interest to attach in some circumstances without a written agreement, it is not practicable to rely on those circumstances always being present in a securitisation transaction. These GSEs purchase loans that satisfy their origination criteria and issue securities backed by pools of such loans that are guaranteed by the relevant GSE. While the decision does not constitute binding precedent, other judges in different jurisdictions are likely to give the decision significant weight in a case presenting the same general questions. Substantive consolidation is an equitable doctrine that permits a bankruptcy court to disregard the separateness of an entity that itself is not otherwise in bankruptcy and that provides an alternative pathway for an SPE to become entangled in its affiliates bankruptcy proceedings. It is common to obtain a true sale opinion in securitisation transactions that evaluates the relevant facts in light of the factors outlined above. Advised Ardagh Group on its definitive business combination agreement with Gores Holdings V to create an independent public company. Wilful violations of the Risk Retention Rules may also give rise to federal or state criminal actions. Examples include domestic family law clinics, supporting children obtain refugee status and amnesty for death row inmates. Shearman & Sterling has historically run four vacation schemes: one in the winter, two in spring, and one in the summer. I have a interview there next week for a VS. Any tips etc. New Metro Global Limiteds $300 Million Senior Notes Offering. Shearman & Sterling represented Seazen Group Limited as the guarantor in connection with the offering of $200 million 4.25% guaranteed senior notes due 2022 by Future Diamond Limited,. Subjects Cambridge Academic Anthropology Archaeology Arts, theatre and culture Chemistry Classical studies Computer science Earth and environmental science Economics Education Engineering General science Geography History Languages and linguistics Law Life science Literature Management Mathematics Medicine Music Philosophy Physics and astronomy The firm leverages the use of smart technology in all of its client work through its innovative data management system, Shearman Analytics, which provides a leading edge in staffing matters leanly and effectively. Notable team of practitioners with impressive experience acting in domestic and international mandates. The ARRCs recommendations suggested the use of a waterfall of fallback language to deal with the potential discontinuance or effective unavailability of LIBOR. Shearman & Sterling 2023 | Attorney Advertising, Committee on Foreign Investment in the United States (CFIUS), Financial Institutions Advisory & Financial Regulatory, Environmental, Social and Governance (ESG), EU General Data Protection Regulation (GDPR), Future of Financial Services Regulation in the UK, Global Compliance & Anticorruption (FCPA), Special Economic Zone and Regulatory Drafting. Synthetic securitisations are permitted. shortfalls in reserves or over-collateralisation; outstanding amounts exceeding applicable collateral borrowing value; delinquencies or charge-offs in excess of specified thresholds; and. Payments based on US-source income to foreign individuals and corporations are potentially subject to withholding tax. The proposed rules would require a number of new disclosures for registrants, including: The proposed rules do not distinguish ABS issuers from corporate issuers, and their application to ABS issuers in the form proposed would be problematic in several respects. Typically, the power to exercise such rights and remedies is given to the trustee with provisions that entitle the trustee to obtain directions backed by indemnification. Shearman & Sterling advised the lenders, comprising Sumitomo Mitsui Banking Corporation, ING Bank NV, DBS Bank Ltd, Bank of China Limited, Mizuho Bank Limited and Socit Gnrale, on the refinancing of the 220 MW Bhola Combined Cycle Gas Turbine project in Bangladesh. and 'Why Shearman & Sterling?' The US bank capital rules distinguish between traditional and synthetic securitisations, each with different operational requirements. Shearman & Sterling represented the dealer managers in connection with the exchange offer by Guangdong Hong Kong Greater Bay Area Holdings Limited of any and all of its outstanding 14% senior notes due 2021 for 13.85% senior notes due 2023. The sale of loans and other receivables can also trigger certain gains or losses, generally depending on whether the SPE is part of the same tax-consolidated group as the transferor, and may, depending on applicable law and the characterisation of the transfer, also have consequences for the transferors continued ability to deduct losses from bad loans. The exact levels and types of credit enhancement will depend on the ratings requirements relating to the desired ratings levels, in addition to commercial constraints on the securitisation. Training contract deadline: Apply for a training contract through a vacation scheme. 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. Shearman & Sterlings hectic but excitingcorporate M&A seat covers work in industries such as mining, telecommunications, financial services and shipping. Its clients, both issuers and underwriters, are among the most highly respected global financial services institutions and the practice understands the evolution of structures because it was involved in many of the industrys significant firsts.