IFLR 1000
The Guide to the World's Leading Financial Law Firms

Securitisation markets worldwide have improved markedly over the past 12 months, however liquidity still remains an issue for many financial organisations, which, unlike banks, do not have deposit funds and have not had access to the Federal Government's guarantee scheme.

For many of these financial organisations, selling their assets or their business has been the only way forward. "There have been a lot for vendors and purchasers in these M&A transactions where the funding regime underpinning those assets or that business has been by way of securitisation," says one partner.

The Australian market has been seeing a lot of changes in regulatory and commercial developments. Firms have increased their activities in advising clients and industry bodies in respect of a range of exciting legislative and regulatory changes concerning covered bonds, Basel III implementation and related prudential reform, IOSCO reforms including "skin in the game" (internal stock purchases), and disclosure requirements. There is also the introduction of the Personal Properties Securities Law (PPSA) which will set up a new regime in personal property security regime in October 2011.

The government's package of reforms in competitive and sustainable banking released in December 2010 included changes to permit covered bond issuances by Australian banks. This has led to the introduction of a covered bond framework in Australia. Firms have needed to provide clients with a comprehensive view of the reforms in Australia and overseas markets which may affect their business on funding and capital markets issues.

In March 2012 Blake Dawson merged with Ashurst with the combined operation adopting the UK firm's name. Initially the merger will be focused on the two firm's Asia operations with full integration expected in 2014.

The firm retains its position as a tier one firm in the structured finance and securitisation practice this year and clients appreciate the team being "very knowledgeable in the structured finance field" and another client comments they are "no nonsense, trying to reach a good outcome firm. I rely upon Blake Dawson and have faith in their work."

A sign of the team's status is its appointment to Commonwealth Bank of Australia's (CBA) legal panel and its reappointed to the panel of RBS.

Led by the highly rated Paul Jenkins, the team acted for CBA as arranger and Australia and New Zealand Banking Group (ANZ), Westpac Banking Corporation and National Australia Bank (NAB) as dealers on Members Equity's A$1 billion ($1.1 billion) superannuation members' home loan RMBS transaction. The transaction saw the team act for all four major Australian banks in connection with a new Australian Office of Financial Management (AOFM) funded securitisation trust.

Another highlight saw Paul Jenkins and Bruce Whittaker advise FleetPartners on both the rating and refinancing of an A$850 million pool of finance. This deal was conducted concurrently and saw the debut A$180 million public securitisation trust better known as the FP Turbo Series 2010-1 Trust. This transaction was the first of its type seen in the Australian market.

Freehills "have got a multi-disciplinary practice... I've dealt with them over a number of years and have enjoyed their innovative solutions," says a client, adding: "I think they are technically very strong, have a collaborative culture, understand clients and try not to come to an immediate answer."

The Freehills' structured finance and securitisation team offers top-tier technical excellence combined with commercial acumen. Over the last 12 months they have remained at the forefront of the market through involvement in a diversity of major transactions in the market.

Lachlan Roots, praised by a client for "his expertise, sense of commercial pressures and pragmatic ways", had a busy year advising National Australia Bank (NAB) in multiple transactions. Firstly it was structuring for and funding of the arrangements in the back book loans acquired by NAB from Challenger Financial Services. Roots was then drafting the documents in relation to the establishment of the warehouse facility provided by NAB to Symbion Pharmacy Services. Finally he advised in relation to the restructure and amendments to the Integrity Mortgage Securitisation CP Trust.

Patrick Lowden, "a trustworthy, high integrity lawyer" according to one client, led a team in advising BNY Mellon in relation to Bella Trust Series 2010-2 and its role as issuer, trustee and security trustee in connection with the securitisation of auto loan receivables.

In March 2012 Mallesons Stephen Jaques merged with King & Wood to form King & Wood Mallesons, the first Sino-Australian firm. In the first phase the two firms will combine their Australian, Chinese and Hong Kong partnerships under a Swiss Verein structure. Full financial integration plans are yet to be announced.

The firm's "quality of partners and lawyers across the firm is second to none in Australian structured finance," a client comments. The team has built a solid foundation with its clients by "always delivering, even in the very tightest of timetables," according to one. Another values Mallesons' "understanding, knowledge and market leading advice".

Last year the team assisted Citigroup in establishing its first structured fund in Australia. Working closely with the derivatives team, the firm advised on structuring, funds, licensing and regulatory issues. Citigroup is one of the main issuers of structured products in Australia but the products are typically structured as over-the-counter derivatives or warrants.

There has been a recent trend shying away from offering retail structured products as over-the-counter derivatives towards offering products through structured funds and Mallesons recently advised Citigroup in conjunction with National Australia Bank (NAB) with advise about such products.

Client had praise for partner Berkeley Cox, describing him as "an extremely thorough practitioner, always delivers solutions in a practical and easily understood format and is extremely dependable". Last year Cox led the team advising Australia and New Zealand Banking Group (ANZ) and Westpac Banking Corporation as arrangers on the inaugural issuance by FB Turbo Trust 2010-1 of asset-backed pass-through floating rate notes with a turbo feature. This deal was extremely complex due to the issue of securities backed by non-residential mortgage-backed securities (RMBS) assets in challenging market conditions.

The departure of star partner Andrew Jinks, who left for Clayton Utz, raises some questions for peers over the AAR's position in the structured finance and securitisation market.

However the firm still regularly advises on a range of matters, including RMBS, CMBS, auto and fleet receivables, trade inventory receivables and public-private partnerships (PPPs).

Last year's headline deal saw the team act for Westpac on the Westpac Securitisation Trust Series 2011-1 WST Trust. This transaction marked the return of Westpac to the securitisation market after the recent global financial crisis. Its success was seen as an important step in the continuing re-emergence of confidence in the market and investor demand for high quality Australian RMBS.

Other notable highlights include advising Symbion Pharmacy Services on its A$500 million ($539 million) Securitisation Trade Receivables Programme. This transaction involved establishing a bankruptcy remote special purpose trust, known as the Symbion Pharmacy Services Trade Receivables Trust (The Trusts). The trusts then needed to acquire trade receivables from Symbion Pharmacy Services (Symbion) with the Trust finally issuing (notes) to National Australia Bank (NAB) and Symbion in order to finance the acquisition of those trade receivables.

"What a coup for Clayton Utz!" was the reaction of one rival partner when informed that Andrew Jinks had left Allens Arthur Robinson to join the firm. "The structured finance and securities team at Clayton will improve ten fold," adds another partner.

Clients have always valued Jinks as "an extremely talented lawyer, definitely one of the best in his field in Australia". His arrival adds to an already strong team consisting of Louise McCoach "who has a reputation for advising on the most complex transactions being undertaken in Australia", says another rival partner.

Making his presence felt immediately Jinks advised Commonwealth Bank of Australia (CBA) and National Australia Bank (NAB) as arrangers for Pepper Residential Securities Trust No. 8 on its non-conforming securitisation, which contained a bullet feature.

Another deal led by Jinks saw him advise Community CPS Credit Union's first RMBS. The team advised Community CPS Credit Union on all legal aspects of the transaction from the establishment of the Master Trust documents through the initial term deal.

Other standout transactions included acting for Note Trustee (Australian Executor Trustee) in conjunction with a A$295 million ($318 million) equity raising. This restructuring involved one of the few court approved Part 5.1 creditor schemes of arrangement in relation to the restructure of debt, in addition to two Part 5.1 member schemes of arrangement as part of the wider restructuring.

Gilbert + Tobin is appreciated by its clients with one commenting that "the team is very prompt and responsive, so you're not left waiting. If there is a delay, Gilbert + Tobin will inform you that additional research is being done".

The past year saw the team advising Lloyds TSB as the arranger in regard to securities issued by Headingley residential mortgage-backed securities (RMBS) 2011-1, a securitisation special purpose vehicle (SPV) established in the UK. This was the first Kangaroo RMBS issued in the Australian capital markets.

Since the collapse of Lehman Brothers, Henry Davis York has advised the Perpetual Trustee Company on the flow-on implications for A$125 million ($135 million) of retail credit linked notes issued by an Australian special purpose company, Mahogany Capital. Lehman was successful in obtaining a favourable first instance judgment in New York. The matter was settled in November 2010 on confidential terms.

The matter is particularly significant because the litigation has been closely watched by the structured credit industry. Its ultimate outcome directly affects the value in excess of US$12 billion of similar structured notes in various Lehman's programmes.

One client comments that they value Minter Ellison's method in "spending a lot of time getting to understand the business in a number of facets so the advice they provide is thorough and well thought out."

The past year saw the team advising on the new securitisation programme to refinance the existing securitisation of Hertz's Australia-based rental fleet. This complex cross-border transaction overcame a number of challenges to secure a high rating.

Allen & Overy (A&O) had a busy year acting for a number of authorised deposit-taking institution sponsors. Rival competitors have taken note of the firm's presence in securities work, "high-quality service, and broad range in corporate work with a burgeoning securities practice," was one peers assessment.

The firm's busy year included advising Macquarie Leasing in relation to its SMART Programme in an auto finance transaction by SMART Series 2010-1US Trust. Another similar transaction saw A&O advising the Bank of Queensland in relation to its REDS programme, which securitises residential and auto-equipment finance.

Johnson Winter & Slattery (JWS) has a longstanding strength in M&A transactions and the energy and resources sector. "JWS often leverage their knowledge and experience of working with clients to provide commercially-targeted advice," says one client.

Last year saw JWS advise Abacus Property Group on a $190 million club facility. The refinancing of existing single bank facilities consisted of securing over different ring fenced security pools, with a club facility plus one cross-collateralised security pool.

Last year's early addition of partner Petar Kuessner, significantly boosted the number of securitisation transactions done by the team at Norton Rose. "Service is very prompt and commercial," comments a client.

One highlight for the team last year was assisting Australia New Zealand Bank, Commonwealth Bank of Australia, National Australia Bank, Westpac and HSBC on a $475 million structured transaction to Emerald Grain Australia.