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Maples Group supports major investment banks on Luxembourg securitisation

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A multi-disciplinary team in The Maples Group’s Luxembourg office has supported three major investment banks in the largest diversified payment rights (DPR) securitisation of cross-border remittance flows in Latin America to date.

The Group’s Luxembourg law firm acted as Luxembourg legal counsel to BCP Securities, LLC, Credit Suisse (Securities) LLC and Jefferies Group LLC (the “Initial Purchasers”), while the Luxembourg fiduciary services team provided domiciliation, directorship and accounting services.

The Initial Purchasers purchased notes issued by a Luxembourg special purpose vehicle (the SPV) for the principal amount of USD500 million. The notes are collateralised by receivables originated by Mexican appliances retailer, Nueva Elektra del Milenio SA de CV (Elektra) in the context of its money transfer business. In 2019, reimbursement based money transfer transactions for Elektra represented approximately USD9 billion in remittances.

The legal team, led by Partner and head of Luxembourg Finance, Arnaud Arrecgros, structured and set up the SPV, provided legal, tax and regulatory advice, negotiated the transaction documents and acted as the listing agent for the listing of the notes issued by the SPV on the Securities Official List of the Luxembourg Stock Exchange.

Following the team’s advice, the SPV was set up as a securitisation fund in the form of a fiduciary estate, which is tax transparent, does not have legal personality and the features of which are often compared to those of a trust.  Although rarely used, this type of vehicle is becoming increasingly popular in Luxembourg, as it has proven to be very resilient in a constantly changing regulatory environment.

Commenting on the transaction, Arnaud says: “It was a pleasure to contribute to this innovative and technically challenging transaction, which truly demonstrates our comprehensive capabilities and expertise in structured finance transactions in Luxembourg.  This complex transaction also showcased our ability to adapt to new and evolving legislation and case law challenges, some of which arose during the course of the negotiations.” 

In addition to Arnaud, the legal team comprised of Associate, Maurice Honnen, as well as Tax Principal, James O’Neal and Associate, Rui Duarte. On the fiduciary side, the team was led by Senior Vice President, Constanze Schmidt, who was supported by Vice Presidents Anika Oberbillig and Christian Klar.

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