Repackaging ("repack") programme issuances have gained momentum this year, despite the slowdown caused by the COVID-19 pandemic elsewhere in structured markets, as investors continue to gravitate towards this highly flexible method of financing.
The proliferation of more streamlined legal documentation for repack programmes in recent years, using Cayman Islands, Irish, Luxembourg or Jersey-based vehicles, allows arranging banks to quickly issue debt securities in a variety of forms, once an underlying asset has been matched with an investor. Often, it is the ultimate investor who, having first identified a particular class or type of collateral for which they wish to invest, provides the impetus for the arranging bank to structure a particular series via their existing repack platform.
Repack vehicles, while well regarded for their "plain vanilla" or "market accepted" documentation, can also benefit from greater optionality of "plug and play" modules, which allow arranging banks to customise a particular series offering to meet specific investor interest or need. Driven by this investor demand, the new generation of repack programmes offer far greater levels of optionality than their predecessors do with investors able to negotiate bespoke terms as well as an interest rate and maturity profile that works for them with much greater ease.
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