LOBAL FINANCIAL MARKETS LAW AND PRACTICE
Word limit: 5000 words
1) B Bank has originated a Home Loan Portfolio secured on residential properties and borrowers domiciled in the State of Ruritania.
Ruritania has only recently recognised the concept of private property rights in its laws and there is still considerable legal uncertainty in this area.
A feature of these loan assets is that the Borrowers were given the right to draw down further funds over time to meet their changing lifestyle needs; however most of the loans are now fully drawn down.
In order to improve profitability and meet the regulatory requirements of the Central Bank in Ruritania, B Bank is now proposing to enter into a Eurobond Securitisation or CDO transaction based on these loan assets. The bond issue will be denominated in dollars and involve an Issuer listed on the London Stock Exchange.
This is the first such bond transaction B Bank has embarked on and it is keen to promote maximum marketability for the Bonds and to ensure that transaction costs are kept to a minimum and that any opportunities for B Bank to earn fees are exploited.
Advise B bank as to the use of legal structures and techniques to achieve its objectives, considering the legal risks and issues arising in relation to:
(a) any transfers of the loan assets, including any associated rights and any obligations in respect of the further advances;
(b) the negotiability of the bonds;
(c) any possible claims against the Issuer arising out of the bond issue including claims relating to Ruritanian law; and
(d) matching the currencies of accountfor payment under the loan assets and the bonds .
note: I want oxford referencing style.