McDermott Will & Emery
4 Experts
8 Contributions by McDermott Will & Emery Experts
PRACTICE NOTES
Over recent years, a broader mix of organisations has looked to tap the capital markets. Where once capital markets activity was largely the domain of banks, financial institutions and commercial companies, a wider array of entities has begun to participate in this arena. The rapidly expanding range and variety of innovative financial instruments demonstrates that effective cooperation across the public, private and voluntary spheres is achievable when they join forces on capital markets transactions and structure deals together in practice. This shift continues to gather pace.
Social Impact Bonds (SIBs) and Development Impact Bonds (DIBs)
Tackling persistent social challenges has long troubled both governments and the charitable sector alike. Deep-seated problems—such as children in care, homelessness, barriers to education, youth employment and long-term health conditions—often arise where the state is constrained in what it can do, or has previously struggled to respond
Banking & Finance
PRACTICE NOTES
What is microfinance?
The Consultative Group to Assist the Poor (CGAP) describes ‘microfinance’ as the provision of loans, savings and other basic financial services to the poor. Stakeholders interpret microfinance through their own lenses and thus tend to define it accordingly.
Governments regard it as social protection.
Donors emphasise its capacity to achieve poverty reduction.
Commercial insurers see a pathway to large under-served markets.
Analysts use it to spotlight the scale of the ‘bottom of the pyramid’.
Academics consider it a crucial financial service for sustainable economic growth.
These views broadly mirror those for conventional insurance, except for the clearly specified target group: low-income people. Put simply, microfinance is a collection of practices created to widen access to financial services (including loans, savings products, insurance and remittance services) for low-income clients. Typically, these clients are drawn from the poor
Banking & Finance
PRACTICE NOTES
Definitions
The terms and conditions (T&Cs) for the notes (the Notes) appear within the Prospectus and, for every form of securitisation, also as a Schedule to the Trust Deed itself. This Practice Note outlines what is set out in those T&Cs. Usually, the T&Cs relate to the Notes solely in global form and indicate that, in certain narrow situations, definitive Notes might on occasion be issued. In those instances, the T&Cs will be revised as required.
This method removes the need to address definitive Notes, Coupons and Talons within the T&Cs, the Trust Deed or the Master Definitions Schedule across the documentation suite. Previously, aspects of the T&Cs were shaped on the assumption that Noteholders would trade definitive Notes bearing the T&Cs on the reverse, and a potential purchaser needed clarity in full about exactly what was being
Banking & Finance
PRECEDENTS
This is a template closing memorandum for use in a high-yield bond transaction.
It provides a framework for completing a high-yield bond deal, outlining the actions required throughout the process.
Depending on the transaction, further papers or procedures, including escrow arrangements, might be necessary. What is needed will vary with the features of the offering in question.
This model closing memorandum assumes a secured high-yield issue that benefits from group guarantees, carries ratings, is admitted to trading on a stock exchange, and involves the issuer relying on Regulation S and Rule 144A under the US Securities Act 1933.
You may encounter transactions that proceed without a closing memorandum; in such cases, lawyers prepare only the certificates that would ordinarily sit behind it.
Where this approach is taken, confirm every certificate is produced and that each requisite document and step is
Banking & Finance
PRECEDENTS
Signing and Closing Memorandum
A Signing and Closing Memorandum is needed to facilitate the orderly completion of a complex deal. This template signing and closing memorandum outlines actions to be undertaken to finalise a commercial mortgage-backed securities (CMBS) transaction. Further documents or actions might be necessary, subject to the particulars of the transaction in some cases...
Banking & Finance
PRECEDENTS
Signing and Closing Memorandum
A Signing and Closing Memorandum is necessary to support the seamless completion of a sophisticated deal. This precedent signing and closing memorandum outlines the actions to be taken to complete a residential mortgage-backed securities ( RMBS ) transaction at closing. Further documents or actions might be needed, subject to the particular transaction...
Banking & Finance
CHECKLISTS
The documents set out below give a snapshot of the principal transactional papers commonly used to document a high yield bond issuance. For each, the summary outlines its function and identifies the relevant parties who would ordinarily sign it. Further documents might be necessary to address features of a particular deal (for example, escrow mechanics) or to capture tailored arrangements specific to that transaction...
Document Description
144A Global Note
A single note executed by the issuer evidencing the full principal amount for the Rule 144A tranche. Section 5 of the US Securities Act of 1933 requires every offer and sale of securities in the United States to be registered with the Securities and Exchange Commission (SEC) unless an exemption applies. Rule 144A provides a safe harbour from the Section 5 registration obligation, thereby permitting the initial purchasers of the bonds (see Purchase Agreement below) to
Banking & Finance
CHECKLISTS
Introduction
High yield bonds sit within securities regulation and, save for a few narrow carve-outs, are subject to New York law irrespective of the issuer’s domicile. They are brought to market under an indenture, which also provides for the appointment of a trustee to act for the bondholders. For further detail on the high yield product, see Practice Notes: Introductory guide to high yield bonds and High yield debt in 11 jurisdictions worldwide. For a snapshot of the principal deal papers needed for a high yield issuance, see Checklist: Issuing high yield bonds-documents list. Beyond setting out the issuer’s key covenants, the indenture includes provisions required to administer the bonds and to enable the bond trustee to discharge its duties. The trustee’s core role is to handle administrative matters for bondholders before any default and, where appropriate, to pursue enforcement on their behalf. For
Banking & Finance
If you expected to see yourself on this page, click here.
