Herbert Smith has landed its first securitisation for Deu-tsche Bank after triumphing in a competitive tender.
The firm nudged out Deutsche’s regular advisers on securitisations – understood to include Clifford Chance and Linklaters – to act for Deutsche and JPMorgan Securities as lead managers on the issue of £1bn of notes by Paragon Mortgages.
As a regular visitor to the market (this is Paragon’s eighth issue of this type) the company has significant sway over the advisers acting for the banks on its notes issues.
It touted Herbert Smith to Deutsche for the role after the firm acted for the lead managers on a number of Paragon’s previous securitisation matters, including advising HSBC as manager on Paragon Mortgages (No 5). But this is the first time Herbert Smith, led by partner Jane Borrows, has worked on a bond issue for Deutsche.
The deal saw Borrows working alongside Sidley Austin Brown & Wood partner Matthew Duncan. Sidley, led by Duncan, again scooped the role for Paragon, having advised on its previous notes issue. It is understood Sidley handled the bulk of the documentation on the deal.
The transaction follows a spate of client wins for Herbert Smith’s securitisation team. Last September it advised Lehman Brothers for the first time as arranger and co-lead manager on the issue of £1.5bn of notes by Lothian Mortgages. 2003 also saw the firm’s securitisation team win HSBC and Merrill Lynch as new clients.
Standard mortgage-backed securitisations are an increasingly commoditised and price competitive area of capital markets, with the law firm incumbents – Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer and Linklaters – targeting the esoteric deals after coming under increasing price pressure from new entrants to the market.
National giant DLA, for example, has announced its plans to attack vanilla capital markets work.