Reed Smith and Clifford Chance among firms advising on £662m Eurosail restructuring

Reed Smith, Allen & Overy and Clifford Chance were among firms advising on the restructuring of a £662m residential mortgaged-backed securitisation (RMBS) by Eurosail-UK 2007-5NP, originally arranged by Lehman Brothers.

The transaction is the second UK Lehman RMBS deal to be effectively restructured to resolve the ‘broken swap’ issues since Lehman Brothers’ bankruptcy in 2008.

However, it is the first to have required bondholder meetings to vote on the proposals, which were held on 26 November.

“Various issues arise from Lehman’s bankruptcy,” said structured finance partner Tamara Box, who led on the deal for Reed Smith. “They were a number of counterparties and it’s a bit like herding cats. But in our view, with a very responsive issuer and counsel to the issuer this sort of restructuring is possible. We’re confident this can be done for other deals.”

Box’s team included structured finance associates James Fisher, Simon Hugo and Sarah Caldwell. Partners Andrea Pincus and Lal Mack in New York provided US insolvency and regulatory advice, while London partners Caspar Fox and Harriet Morgan assisted with tax advice alongside Angelo Ciavarella in New York.

Tods Murray advised Wilmington Trust and Eurosail 5NP on Scottish law aspects of the deal, while Tughans was instructed on the Northern Irish matters.

Clifford Chance advised the noteholders on English and New York law, led by real estate finance partner Emma Matebalavu with assistance from capital markets senior associate Paul Deakins and banking associate Laura Smallcombe.

Capital markets partner Chris Walsh advised captive Lehman servicer Acenden – formerly Lehman’s UK mortgage services division Capstone – as cash/bond administrator, alongside capital markets associate Nick Henneberry.

Allen & Overy advised trustee BNY Mellon, led by capital markets partner Simon Hill, while Latham & Watkins represented account bank Danske Bank.