UK: Lovells Advises On Largest Ever CDO In Japan For BNP Paribas
Last Updated: 29 November 2001

On Tuesday 20 November BNP Paribas closed the largest ever collateralised debt obligation issued in Japan. Lovells acted as adviser to BNP Paribas as the lead manager on the deal in London, Tokyo and Paris.

BNP Paribas is a long-standing client of Lovells and this is the fourth CDO which Lovells have closed for them this year, having advised on Riviera Finance 1 & 2 in March and August and CDO Master Investments, also in August. However, this is the first time Lovells have advised BNP Paribas from Tokyo, through the firm's recently established Tokyo based capital markets and structured finance team.

Serena Finance Limited, a Caymans company, issued in total ¥9 billion of secured notes, comprising ¥5 billion Class A Series 1 Secured Floating Rate Notes due 2007, ¥2 billion Class B Series 1 Secured Floating Rate Notes due 2007, ¥1 billion Class C Series 1 Secured Floating Rate Notes due 2007 and ¥1 billion Class D Series 1 Secured Floating Rate Notes due 2007. The Class A Notes were rated AAA by Rating & Investment Information, Inc., the Japanese rating agency, the Class B Notes were rated AAA by R&I, the Class C Notes were rated AA+ by R&I and the Class D Notes were rated A+ by R&I.

As part of the transaction, Serena sold ¥9 billion of mezzanine credit protection to BNP Paribas on a ¥90 billion basket of 90 Japanese Reference Entities. The transaction was secured on Japanese Government Bonds.

The Lovells' team was led by capital markets partner Tim Lester, assisted by Neil Kurzon in Tokyo, senior lawyer Brian Carne in London, supervised by capital markets partner David Hudd and assisted by Stuart Foulds, and capital markets partner Sharon Lewis, assisted by Emma Barker, in Paris. Additionally, senior lawyer Tauhid ljaz in London acted for the Trustee, BNP Paribas Trust Corporation UK Limited.

Speaking today, Tim Lester said:

"While notably this is the largest CDO transaction of its kind in Japan to date, the deal demonstrates the international strength of Lovells' global capital markets and structured finance practice which was recently expanded through the establishment of a dedicated team in Tokyo earlier this year. Long standing clients such as BNP Paribas benefit from the global reach of the firm and the depth of experience across our offices in structured transactions such as these. We look forward to working with BNP Paribas on other similar deals, wherever they may take place."

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