Linklaters represented Citi and Santander in the inaugural issuance of securities under the Trade MAPS Program. The Series 2013-1 securities are rated by Fitch and S&P and are backed by a diversified portfolio of trade finance assets originated by Citi and Santander in multiple booking centres across the globe.
The Trade MAPS Program allows participating banks to fund their trade businesses through the issue of term securities. It provides long-term funding for traditionally short-dated assets and enhances the banks’ liquidity position – important issues as financial institutions adjust to the changing global regulatory environment. The Program also introduces a new category of asset-backed securities to the ABS market.
As lead counsel, Linklaters was at the forefront of the design, structuring and implementation of the Trade MAPS Program. The Program is the first of its kind and has many unique features:
* it allows for the participation by multiple banks, whether domiciled in the US, Europe, Asia or elsewhere
* it accommodates the latest US GAAP/IFRS asset derecognition requirements
* it matches the banks’ global reach, allowing for the funding of assets from across the globe
* it accommodates the latest securitisation risk retention requirements under Dodd-Frank and EU Risk Retention Rules
The precursor to the Trade MAPS Program was the Citi CABS Program that closed in 2006 – Linklaters was lead counsel on this transaction also.
The inaugural issuance under the Trade MAPS Program involved booking centres located in New York, Bahrain, Hong Kong, Singapore, Bahamas, Madrid and London, with Citi and Santander having the flexibility to add additional booking centres. The underlying trade finance assets have obligors located in Asia, the Middle East, Europe, North America and South America and from industries as diverse as farming/agriculture through to financial intermediaries and transportation. Each bank sells assets from local booking centres to dedicated asset purchasing entities, which then fund themselves through securities issued by Trade MAPS 1 Limited.
The Linklaters team comprised lawyers from 19 of the firm’s offices, reflecting the multi-jurisdictional nature of the Program.
Paul Kruger, the Partner that led the Linklaters team, commented that “In my 25 years of executing asset-backed transactions, Trade MAPS is by far the most innovative and complex. We brought together complex tax, legal and regulatory issues and helped design and structure a dynamic funding platform that met the banks’ objectives”.
Noah Melnick, Counsel in the firm’s New York office, noted that “The simultaneous documenting and closing of what, in effect, constituted 8 separate securitisation transactions presented its own challenges – this necessitated a whole new approach to documentation. All of this was done in the relatively new regulatory regimes in place in the US and Europe”.
Commenting on the issues faced on the asset-side of the Program, Mary Matson, Counsel in the firm’s Hong Kong office, noted that “The target was to enable assets from the banks’ entire trade business to be funded through the Program – from China and India through to the US and Brazil and everything in between. We analysed the legal and regulatory position in over 60 countries and developed bespoke asset-sale structures to provide the banks with maximum flexibility”.
