Cadwalader Law Firm Forms Covered Bonds Practice Group

NEW YORK — Cadwalader, Wickersham & Taft LLP, one of the world’s leading international law firms, announced the formation of a Covered Bonds practice group to serve global clients entering the space and to advocate on behalf of removing regulatory impediments to the issuance of covered bonds by U.S. based financial institutions. 

“The evolving financial markets have focused attention on alternative means of financing assets in the capital markets and covered bonds seem certain to become a key technique available to those seeking financing for residential or commercial lending businesses,” said Robert O. Link, Jr., Cadwalader’s Managing Partner and the Chairman of the firm’s internationally recognized Capital Markets Department.  “This initiative is rooted in Cadwalader’s legacy as one of the most respected capital markets legal advisors to the financial services industry. 

The formalization of this team of attorneys, comprised of partners from the firm’s New York and London offices with expertise in residential and commercial mortgage loan origination, securitization, tax, insolvency and financial services regulation, recognizes the unique breadth of legal talent we have at Cadwalader to serve clients involved in every aspect and type of real estate finance.”

“While covered bonds backed by U.S. assets are a developing area, there can be no doubt that the tradition of innovation that has characterized U.S. mortgage finance will lead to as robust a covered bond market as we have seen in Europe,” noted London-based Capital Markets partner Conor Downey, who has advised on a number of such transactions in Europe.

A covered bond is a class of corporate debt instrument, issued by a financial institution and backed by a specified pool of high quality assets or  “cover pool,” with interest and principal payable out of income from the cover pool, as well as a debt obligation of the issuing institution.  As a result, investors are provided with two potential sources of repayment and greater security and certainty in the event of a default. 

“On July 15, the FDIC issued a final policy statement to provide guidance on the availability of expedited access to collateral pledged for covered bonds issued by insured depository institutions in the event of a receivership or conservatorship and the scope of compensatory damages payable by the FDIC if it exercises its power to repudiate the bonds. Although limited in scope, this was an important step in clarifying U.S. regulatory treatment of covered bonds while leaving room for future amendment based on developments in the covered bond market,” said Cadwalader partner Jordan Schwartz, who, with a team of Cadwalader attorneys, helped a major trade association to submit comments to the FDIC, and who serves on the American Securitization Forum’s covered bond task force and as an advisor to market participants regarding U.S. covered bond structures and regulation.

Joining Messrs. Schwartz and Downey on the team are partners Michael Gambro, Anna Glick, Stuart Goldstein, Lisa Pauquette, Patrick Quinn, Charles Roberts, Jeffrey Rotblat, and Robert Ughetta.  Tax partners Charles Adelman and Gary Silverstein are also assisting with these efforts.

The firm will host a briefing for clients and friends on September 25, 2008 to discuss he development of the U.S. covered bond market.     
 

Cadwalader, Wickersham & Taft LLP, established in 1792, is one of the world's leading international law firms, with offices in New York, London, Charlotte, Washington and Beijing.  Cadwalader serves a diverse client base, including many of the world's top financial institutions, undertaking business in more than 50 countries in six continents.  The firm offers legal expertise in antitrust, banking, business fraud, corporate finance, corporate governance, environmental, financial restructuring and reorganizations, healthcare, insurance and reinsurance, intellectual property, litigation, mergers and acquisitions, private client, private equity, real estate, regulation, securitization, structured finance, and tax.  More information about Cadwalader can be found at www.cadwalader.com.