In the complex world of structured finance, the concepts of true sale and bankruptcy remoteness are not just legal theories but the foundational pillars upon which the entire securitization market is built. A misunderstanding of these principles can jeopardize a transaction's integrity, expose parties to unforeseen risks, and ultimately lead to a failed deal. This comprehensive training course is designed to provide finance professionals, legal experts, and risk managers with a definitive, practical understanding of these critical concepts, ensuring they can navigate the legal and structural challenges of securitization with confidence.

This intensive 10-day program will delve into the intricacies of legal documentation, jurisdictional differences, and the practical application of true sale and bankruptcy remoteness tests. Through a series of interactive lectures, real-world case studies, and hands-on exercises, participants will learn how to identify potential legal risks, interpret key contractual clauses, and structure transactions that are both robust and compliant. By mastering the fundamentals presented in this course, you will be equipped to build resilient and successful securitization transactions in any financial market.

Duration

10 days

Target Audience

• Lawyers and legal professionals in finance
• Structured finance and securitization analysts
• Risk management and compliance officers
• Credit rating agency professionals
• Corporate treasury and finance staff
• Investment bankers and underwriters
• Professionals involved in capital markets
• Auditors and consultants

Objectives

• Master the legal definition and significance of a true sale.
• Understand the core principles of bankruptcy remoteness for a Special Purpose Vehicle (SPV).
• Analyze the key legal tests and factors used to determine a true sale.
• Identify the structural features that ensure an SPV is bankruptcy remote.
• Learn to interpret legal opinions on true sale and non-consolidation.
• Evaluate the impact of different legal jurisdictions on these concepts.
• Understand the role of legal documentation in supporting true sale.
• Develop strategies for mitigating legal risks in securitization.
• Examine real-world case studies and their outcomes.

Course Modules

Module 1: Introduction to Securitization

• An overview of the securitization process and its benefits.
• The roles of the originator, SPV, and investors.
• The importance of legal and structural integrity.
• The purpose of separating assets from the originator.
• An introduction to the core legal principles.

Module 2: The Concept of a True Sale

• The fundamental legal principle of a true sale.
• The difference between a true sale and a secured loan.
• Why a true sale is critical for a successful transaction.
• The legal implications of re-characterization.
• An overview of the key legal tests.

Module 3: Legal Tests for True Sale

• The "intent" test and its role.
• Analyzing the retention of risks and benefits by the originator.
• The role of recourse and repurchase obligations.
• The impact of a "clean break" from the originator.
• The importance of the SPV's independent legal status.

Module 4: Bankruptcy Remoteness of the SPV

• The purpose of making the SPV "bankruptcy remote."
• The legal mechanisms that create bankruptcy remoteness.
• The use of independent directors and special provisions.
• The concept of non-consolidation and its legal basis.
• The role of the SPV's corporate charter.

Module 5: The Legal Opinion

• The purpose and significance of a legal opinion.
• The difference between a true sale and a non-consolidation opinion.
• The legal counsel's due diligence process.
• Understanding the qualifications and assumptions in an opinion.
• How a legal opinion impacts the rating of a deal.

Module 6: Documentation Supporting True Sale

• The Asset Purchase Agreement and its key provisions.
• The representations and warranties of the originator.
• The Servicing Agreement and its impact on control.
• The role of legal covenants and indemnification.
• The language that proves a true sale.

Module 7: The Role of the Originator

• How the originator's actions can impact true sale.
• The risk of a "retained interest" in the assets.
• The proper way to transfer assets to the SPV.
• The legal and practical consequences of commingling funds.
• The importance of a clean asset list.

Module 8: Servicing and True Sale

• The legal relationship between the servicer and the SPV.
• The "agency" vs. "principal" role of the servicer.
• How the servicer's discretion can affect true sale.
• The importance of an independent servicer.
• The legal remedies in a servicer default.

Module 9: Jurisdictional Differences

• True sale and bankruptcy concepts in different legal systems.
• An overview of US bankruptcy law and its impact.
• The legal frameworks in common securitization jurisdictions.
• Cross-border securitization challenges.
• The importance of choice-of-law provisions.

Module 10: Advanced Structural Considerations

• The use of liquidity facilities and credit enhancements.
• The impact of derivatives on the true sale analysis.
• Understanding the role of a contingent equity interest.
• The legal analysis for synthetic securitization.
• The legal issues surrounding revolving credit facilities.

Module 11: The Rating Agency Perspective

• How rating agencies evaluate true sale and bankruptcy remoteness.
• Their focus on the legal risks and opinions.
• The importance of structural integrity for a rating.
• The role of an independent counsel report.
• Recent developments in rating agency methodologies.

Module 12: Accounting and Regulatory Implications

• The relationship between true sale and accounting derecognition.
• The impact on the originator's balance sheet.
• Basel III and the regulatory capital treatment of securitization.
• The role of legal opinions in regulatory filings.
• The consequences of a re-characterization for a bank.

Module 13: Practical Case Studies

• An analysis of a historical securitization deal.
• We will review the deal's structure and legal documentation.
• Identifying the strengths and weaknesses of the true sale analysis.
• A discussion of how a court might view the transaction.
• What could have been done differently?

Module 14: Drafting and Negotiation Workshop

• A hands-on exercise in drafting key contractual clauses.
• Participants will role-play a negotiation between parties.
• A focus on language that strengthens true sale and bankruptcy remoteness.
• Redlining and commenting on a sample agreement.
• Best practices for legal documentation.

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 7 working days before commencement of the training.