Repackaging vehicle

The Law and Lore of Repackaging →Go uptown Top Trumps®Financial Weapons of Mass Destruction® Repack Programme “It’s exotic, it’s Caribbean, it’s transformative — but somehow just not that exciting any more.” Docs Propectus, agreements, supplements, swaps, global notes, side letters galore. Most exciting part: limited recourse. Yes: that exciting. 2 Amendability Bugger all, because of the trust structure. What? You think the Trustee’s going to take a view? 7 Collateral Fully funded. Note is fully collateralised. 4 Transferability In theory unlimited: cleared, dematerialised bearer notes. In practice? Forget about it. No-one wants your home-made espievie notes. 7 Leverage Not really. 3 Fright-o-meter CAYMAN ISLANDS DUDE! In reality, depends what you put in it, but mostly tame. 5 Repack Anatomy: Hedging exemption | Covenant to pay | Quoted Eurobond exemption | Pre-enforcement | The curious structure of an MTNIndex: Click ᐅ to expand: Repackaging Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

Zombie queen ants

When contemplating the legal contracts around a repackaging programme, it is well to remember: a repackaging vehicle is a zombie queen ant, prostrate in its Caribbean nest, immobile, pinned down and paralysed, while a small army of drones, agents, bots and pleasure-droids crawl over it, administering necessary opioids and analgesics so that the various investors, hedge counterparties and agents can do whatever it is they want to do to each other under a prophylactic cloak of non-responsibility. It is rather like swimming in wellingtons, we are told.

Note issuing vehicle

We rather think a repackaging vehicle would fall within the definition of “note-issuing company” under section 83(3) of the Finance Act 2005:

A “note-issuing company” means a company in relation to which the following conditions are met—

(a) it is party as debtor to a capital market investment,

(b) the securities that represent the capital market investment are issued wholly or mainly to independent persons,

(c) the capital market investment is part of a capital market arrangement, F3. . .

(d) the total value of the capital market investments made under that capital market arrangement is at least £50 million [F4, and

(e) if it has any business apart from the activity mentioned in paragraph (a) (and any incidental activities) it consists in one or both of the following—

(i) acquiring, holding and managing assets forming the whole or part of the security for the capital market arrangement;

(ii) acting as guarantor in respect of loan relationships, derivative contracts, finance leases or other liabilities of other companies where the whole, or substantially the whole, of the company's rights in respect of the guarantee (including any right of subrogation) form the whole or part of the security for the capital market arrangement.

See also

• repackaging programme