October 18, 2019
Latham & Watkins won Impact Deal of the Year and Innovation of the Year at Structured Credit Investor’s inaugural Capital Relief Trade Awards, as well as receiving an honourable mention for Law Firm of the Year.
For Impact Deal of the Year, the judges looked for a transaction with an environmental or social benefit, and recognized the Latham’s work on Room2Run, led by London partner Sanjev Warna-kula-suriya and Paris counsel Suzana Sava-Montanari. The African Development Bank (AfDB) and Mariner Investment Group (Mariner) developed Room2Run, a US$1 billion synthetic securitisation on a portfolio of pan-African loans. Room2Run takes capital relief transactions (CRTs) for Multinational Development Banks (MDBs) from concept to reality for the first time. Latham advised Mariner as lead investor in Room2Run.
Latham and opposing counsel Clifford Chance worked to educate the MDB on synthetic securitisations and the nature of this capital management tool. The team also designed a sophisticated mechanism to address AfDB’s policies while ensuring protection for the investor’s collateral similar to that found in other CRTs. The transaction has the potential to revolutionize how MDBs manage their capital, expand lending capacity, and promote development. Room2Run provides the platform for AfDB to fill the infrastructure gap and to significantly influence the quality of life for people in Africa.
Suzana Sava-Montanari commented: “We are very happy with the way the deal went, and especially pleased to have engaged successfully with a visionary MDB and investors who were inspired and ready to be the first to do such a transaction. It was also a success in that the deal freed up a significant amount in lending capacity to fund African infrastructure and other projects.”
Latham was also involved in the winning entry for Innovation of the Year, which the judges noted stood out for introducing a number of ground-breaking structural innovations, with opposing counsel White & Case. A team from Latham’s Paris office led by counsel Suzana Sava-Montanari, with tax advice from partner Olivia Rauch-Ravise and regulatory advice from late counsel Frederic Chamboredon, advised on an innovative risk transfer transaction that, for the first time, incorporated a capital allocation factor to incentivize additional positive impact finance lending, between Societe Generale and Mariner Investment Group.
The US$3.4 billion transaction, dubbed Jupiter, references more than 250 loans in over 40 countries across a variety of sectors, including energy, infrastructure, shipping, aircraft, metals and mining, real estate, and TMT. Under the terms of the transaction, Societe Generale has committed to dedicate 25% of the risk-weighted asset reduction to spur new positive impact financing over the next three years. By reallocating the released capital from the legacy loan book and dedicating it to enhance the capacity to finance new positive impact projects, the parties aim to strongly advance the UN Sustainable Development Goals.