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By Richard TylerTravers Smith Braithwaite and Allen & Overy (A&O) have broken new ground in the structuring of a £610m securitisation of the rental income generated by retail leases at The Trafford shopping centre in Manchester.But Berwin Leighton has been snubbed by long-standing client Peel Holdings, the parent company of The Trafford Centre. Berwins used to undertake all property lease and financing work for the shopping centre, but Peel’s head of legal, Peter Hosker, decided to turn to Travers partner James Richards to structure and document the securitisation.Berwins was left to wind up the existing financing arrangements and organise the property aspects of the deal.Berwins’ property consultant Malcolm Brummer said: “Peel could have gone to one firm – we certainly could have handled it. But Peel thought they were better off using two advisers they knew well.”Brummer led Berwins’ team, assisted by property partner Claire Milton and assistant Kim Brown. A&O’s senior securitisation associate, Conor Downey, led a team for Deutsche Bank and Royal Bank of Scotland which worked alongside Travers in structuring the securitisation.The two teams had to reject the secured loan structure used in 95% of securitisations, whereby an asset is sold to a special purpose vehicle (SPV), which issues bonds and returns the income to the originator.The problem with this structure is that it only works for assets that can be sold and easily managed, such as mortgages. It has also been successfully used to securitise office rental income streams at Canary Wharf and the Broadgate complex in London.But for the Trafford Centre, the lawyers needed to balance the volatile nature of retail leases and the need for more flexible management with the need for a good credit rating for the bonds. So Downey said A&O and Travers turned to a structure developed by A&O and Freshfields about four years ago. This alternative structure uses English law security to achieve the same effects as an asset sale, but the proceeds from the bond issue are loaned back to the originator and the asset is taken as security.If the originator – the Trafford Centre – could not keep up the payments, a receiver would be appointed by the SPV, which could come from the originator’s original management. The finance is in five tranches, the longest dated for 2033, with £390m of the senior debt given a top rating of AAA/Aaa by all four of the international rating agencies.Finance partner James Richards led Travers’ team, which included finance assistant Paul Lyons and tax partner Richard Stratton.A&O’s team included securities associate Sonya Rofani and tax associate Dorothy Wilkinson. Partner David Krisher was in overall charge of the team.

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