The success of any securitization transaction hinges on a robust and meticulously crafted legal framework. The contracts and documentation are the very blueprint of the deal, defining the rights and obligations of every party, from the originator to the ultimate investor. Without a deep understanding of these legal instruments, professionals risk exposing their deals to significant operational, financial, and reputational hazards. This training course is specifically designed to demystify the complex world of securitization law, providing a practical and hands-on guide to the essential agreements that underpin these sophisticated financial structures.

This comprehensive 10-day program will take you on a journey through the entire legal lifecycle of a securitization deal. We will examine each critical document, from the initial trust agreements to the final offering circulars, with a focus on practical application and real-world case studies. You will learn to identify key risk allocation clauses, navigate complex legal opinions, and understand the intricate relationship between legal contracts and regulatory compliance. By the end of this course, you will possess the expertise to review, draft, and negotiate securitization documentation with confidence and precision.

Duration

10 days

Target Audience

• Lawyers and legal professionals in finance
• Investment bankers and structured finance analysts
• Compliance and risk management officers
• Corporate treasurers and financial controllers
• Portfolio managers and fund managers
• Professionals at credit rating agencies
• Financial regulators and government officials
• Senior management and board members of financial institutions

Objectives

• Understand the legal architecture of a securitization transaction.
• Master the key provisions and purpose of each core legal document.
• Analyze how legal documents allocate risk among different parties.
• Identify key legal risks and potential deal-breaking issues.
• Learn to draft and review contractual clauses with precision.
• Interpret legal opinions and their significance for a deal.
• Evaluate the impact of bankruptcy and insolvency law on securitization.
• Develop a strategic approach to negotiating legal agreements.
• Understand the legal requirements for disclosure and transparency.

Course Modules

Module 1: The Legal Framework of Securitization

• The concept of a true sale and its legal implications.
• The role of the Special Purpose Vehicle (SPV) as a legal entity.
• Understanding the bankruptcy-remoteness of the SPV.
• The legal transfer of assets from the originator to the SPV.
• The importance of legal counsel and transaction parties.

Module 2: The Trust Agreement and Servicing Agreement

• The role of the trustee and the trust agreement.
• Key provisions of a servicing agreement.
• The rights and responsibilities of the servicer and subservicer.
• How the agreement governs the flow of funds and reporting.
• The legal ramifications of a servicer default.

Module 3: The Indenture and Security Agreement

• The function of the indenture as a legal contract.
• The rights and obligations of the bondholders and the trustee.
• The role of the security agreement in collateralizing the deal.
• The perfection of security interests and liens.
• Legal remedies for bondholders in case of default.

Module 4: The Asset Purchase Agreement

• The legal document for the sale of assets to the SPV.
• The representations and warranties of the originator.
• Covenants and indemnification clauses.
• The conditions precedent to closing the transaction.
• The impact of a breach of a purchase agreement.

Module 5: The Underwriting and Placement Agreements

• The role of the underwriter and the underwriting agreement.
• Legal responsibilities in a public offering of securities.
• The concept of due diligence and its legal importance.
• The legal distinction between a public offering and a private placement.
• The representations and warranties of the issuer.

Module 6: The Offering Circular and Prospectus

• The legal requirements for a prospectus.
• The role of disclosure and transparency for investors.
• Key sections of an offering circular.
• The legal liability for misstatements or omissions.
• How to read and interpret the legal risk factors section.

Module 7: Legal Opinions and Their Importance

• The purpose of a legal opinion in a securitization deal.
• Types of legal opinions, including true sale and non-consolidation.
• The legal counsel's due diligence process.
• The limitations and qualifications of a legal opinion.
• The legal consequences of an incorrect opinion.

Module 8: The Role of the Legal Counsel

• The scope of work for the legal team.
• The process of drafting and negotiating legal documents.
• Managing the legal due diligence process.
• Interacting with regulators and external parties.
• Ethical considerations for legal counsel.

Module 9: Bankruptcy and Insolvency Law

• The legal concept of a "safe harbor" provision.
• The impact of a bankruptcy filing on the SPV.
• The legal distinction between a true sale and a secured loan.
• The "substantive consolidation" risk and how to mitigate it.
• The legal rights of creditors in an insolvency proceeding.

Module 10: Perfection and Priority of Security Interests

• Understanding the Uniform Commercial Code (UCC) in the US context.
• The legal steps to perfect a security interest.
• The concept of priority among competing creditors.
• The impact of incorrect or unperfected filings.
• The legal requirements in a global context.

Module 11: International and Cross-Border Considerations

• The choice of governing law for a securitization deal.
• The enforceability of contracts in different jurisdictions.
• The role of international legal standards and treaties.
• Tax law implications in cross-border transactions.
• The challenge of harmonizing legal frameworks.

Module 12: Advanced Contractual Clauses

• A deep dive into triggers and cash flow waterfalls.
• The legal definition of "events of default."
• Covenants related to the performance of the assets.
• Indemnification and liability clauses.
• The legal mechanisms for deal termination.

Module 13: The Role of Rating Agency Legal Reviews

• How rating agencies review legal documents.
• Their focus on non-consolidation and true sale opinions.
• The legal criteria for a favorable rating.
• The legal role of rating agency pre-sale reports.
• The legal representation to the rating agencies.

Module 14: Practical Workshop: Document Review

• Participants will work in teams to review and comment on a redacted securitization agreement.
• They will identify potential legal risks and issues.
• A discussion on drafting alternative clauses to mitigate risk.
• Role-playing a negotiation with legal counsel.
• A peer review of the legal analysis.

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.