Winner: Simmons & Simmons

Simmons & Simmons wins SCI’s Law Firm of the Year award, following a year which saw increased progress, volumes and international coverage for the firm in the capital relief trade sector. The international law firm impressed with its ability to deliver first-class CRT advice to investors in all major European CRT jurisdictions. As the CRT market continues to grow and mature, Simmons & Simmons stands at the forefront of legal advice for investors. 

A leading international law firm, Simmons & Simmons boasts 21 offices across the UK, continental Europe, Ireland, the Middle East and Asia. Its large and well-established structured finance and derivatives practice advises clients on capital relief trades and broader risk transfer mandates, including derivatives products and associated regulatory advice. The firm additionally works extensively on other forms of financial guarantee and risk transfer transactions, including advising governments and supranational institutions on their Covid-19 guarantee schemes.

Sitting within this wider structured finance and derivatives team, Simmons & Simmons CRT practice is led by partner David Toole in London. “It has been a fantastic and breakthrough year for our CRT practice, in terms of growth and particularly in the spread of jurisdictions that we cover and operate in,” notes Toole.

Acting on approximately 30 CRT transactions in the last year, the firm continued to expand its expertise of CRT outside of the UK, reflecting the spread of CRT transactions across Europe and its continued growth in more well-established markets, such as Italy and Germany. The practice has expanded and trained specialist across its offices to cover CRT in all major jurisdictions for the market. The firm’s established international network has allowed it to successfully advise investors on CRT transactions governed by French, German, Italian, Irish, Luxembourg as well as English law (notably through its London, Paris, Frankfurt and Milan offices). 

Simmons & Simmons has acted for significant investors in the market, including Alecta, Anacap, Christofferson, Robb & Co, the European Investment Fund, PAG, PGGM and various leading hedge funds and institutional asset managers. The firm supported these clients as lead counsel on many of their most important CRT transactions in the last 12 months. Having set up one of the strongest rosters of clients in this market, Simmons & Simmons positions itself as a preeminent advisor and actor in the CRT space.

Indeed, the firm advised clients on some of the most outstanding and notable transactions in the past 12 months. Such matters have included transactions structured as financial guarantees, as credit default swaps (both bilateral and embedded into SPV structures), credit-linked notes and credit-linked deposits.

The firm represented PGGM and Alecta in their investment in a CRT transaction originated by Standard Chartered Bank, in which Standard Chartered became the first bank to benefit from capital relief in Hong Kong. The landmark transaction features a sold first loss tranche with 10% thickness and a portfolio weighted average life equal to approximately 1.5 years, as well as a replenishment period of 3.25 years. Further features included a sequential amortisation structure.

The firm’s role in this transaction demonstrated its position and role as adviser of choice to leading investors and its ability to provide seamless cross-border advice in new and developing CRT jurisdictions.

Simmons & Simmons also advised PGGM and Alecta as co-investors in the inaugural CRT issuance by Helaba - an STS synthetic securitisation backed by a €2.1bn portfolio of corporate loan portfolio and credit protection governed by German law. Additionally, the firm acted on the market’s first STS-compliant SRT transaction involving pan-Nordic assets, referencing a €2.5bn portfolio of Nordic corporate loans and originated by Nordea Bank. 

Such ‘firsts’ reflect Simmons & Simmons’ sophisticated and innovative presence in the CRT market. It further highlights the firm’s strategic goal to cement its position as the ‘go to’ firm for investors in this market.

“Although we act for many of the largest investors, our practice also supports arrangers and originators. This gives us a deep understanding of the perspectives of all market participants. By working with clients across multiple jurisdictions, we develop a strong institutional understanding of each investor, allowing us to support them across all their transactions,” Toole explains. 

Moving forward, Toole expects the CRT market to continue to develop. “Obviously, there are potential challenges in terms of the global economy; however, historically this market has shown itself to be extremely resilient and we expect this to continue. We continue to see a lot of investor interest in the market and, despite the current challenges, we do see new investors coming in and I expect people to continue exploring new asset classes,” he observes.

He concludes: “As the market now is pretty mature and better understood by regulators, I think banks do and will explore new asset classes. This is a trend we expect will continue and there is certainly still investor appetite for that.”

Honourable mention: Clifford Chance
In recognition of the firm retaining its position as dominant law firm in both the European and North American CRT markets, acting as originator and drafting counsel on the vast majority of deals, across the full range of asset classes, jurisdictions and legal structures. Notably, the firm advised on Sumeru IV for Standard Chartered – the first local SRT in Hong Kong – and mBank and Getin Noble on the first SRTs placed with private investors in Poland.

For the full list of winners and honourable mentions in this year’s SCI Capital Relief Trades Awards, click here.

*For more on the outlook for global risk transfer activity, join our complimentary webinaron 2 November at 2pm GMT. Leading CRT practitioners from Arch MI, ArrowMark Partners, Credit Benchmark and Guy Carpenter will discuss current trends in light of today’s macroeconomic headwinds. Click hereto register.*