United Kingdom—The EMI master issuer programme has won Overall Best Securitization Deal of the Year 2020/21 at the 2021 GlobalCapital Awards and EMEA Structured Finance Issue of the Year at the IFR Awards 2020

Dentons' cross border team advised Coventry Building Society on the establishment of its innovatively structured RMBS master issuer programme, Economic Master Issuer PLC, and the first issue of £350 million Class A1 notes and £500 million Class A2 notes under the programme. The notes were 3.6 times oversubscribed by the time they were priced via arrangers and leads HSBC and Lloyds.

On 25 June 2021, the programme was updated as part of its annual update and the issuer issued an additional £350 million of Class A notes under the programme.

The deals were one of only a very small number of prime, public RMBS issues post-pandemic, and the programme is the first new UK master issuer structure to come to market in over a decade. This was a master issuer structure re-invented for the current market which built on many of the features of the older generation of pre-crisis master trusts. The versatility of the structure means a deal can be brought to market in a matter of weeks rather than months.

The programme uses only one SPV to acquire the mortgage loans and issue the notes, and is extremely versatile in its funding options, allowing different profiles of note to be issued. The structure creates the flexibility to issue and switch between profiles, such as bullet, controlled amortisation and pass-through notes. Notes can be UK STS eligible, and can be issued to US and European institutional investors.

The programme also includes variable funding notes to provide credit enhancement within the structure, which were issued once and which remain outstanding for the life of the programme. The variable funding notes include the "seller's note" which fulfils risk retention requirements and allows mortgage loans to be sold into the programme without the issuer having to issue notes to third party investors at the time of the relevant sales, providing greater speed to bring a deal to market as the portfolio can be ramped up between issuances to third party investors.

The arrangers, HSBC Bank and Lloyds Bank, were advised by Clifford Chance. Barclays Bank was a dealer for the second issuance.

Peter Voisey, partner and co-head of Dentons' UK Securitisation and Structured Finance practice, who led on the transaction, said, "We were thrilled to have the opportunity to work with CBS on such an innovative and exciting structure. We are seeing high demand for European ABS in the current climate and were not surprised that the first two issuances were such a hit with investors."

Philip Hemsley, Head of Capital Markets at Coventry Building Society said, "Dentons really delivered for us, they put in the time and expertise to develop the concept and help us mould it to our business. The programme delivers values to our members, giving us a great platform that meets the opening brief of flexibility and speed and cost efficiency, and the inaugural transaction’s success shows we, Dentons, Clifford Chance, Lloyds and HSBC combined to produce something investors really valued."

Alongside lead partner Peter Voisey, the Dentons team included securitisation associates Kamraan Akhtar, Jimmy Yang and Jakub Telicka, derivatives partner Matthew Sapte and associate Annreika Ray, tax partner Alex Tostevin and senior associate Andrew Cromb (all in London), banking and finance consultant Morag Campbell (in Glasgow), and US capital markets partner Steve Kudenholdt and managing associate Cam Morris (in New York).

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