Structured finance and securitisation in Hong Kong

Allen & Overy

Able to call upon a 'breadth of expertise that is second-to-none', Allen & Overy's two-partner team is the 'one to instruct if you need genuine expertise on over-the-counter (OTC) derivatives and related structured finance products and regulatory issues'. As well as advising investment banks and securities houses on many of the most complex transactions in the region (where it also benefits from the ability to leverage significant expertise in mainland China and Singapore), the team has also been at the vanguard of regulatory change in the space, with the firm's proprietary products, including TransforMatrix, being particularly well received in the industry. The 'personable, responsive and solutions-oriented Ross Stewart  has been at the forefront of the firm's efforts out of Asia on the IT proprietary front as it relates to margin for uncleared derivatives, and is appreciated by clients for his 'range of expertise' and his ability to 'combine technical skills with a highly commercial approach'. Yvonne Siew provides 'practical and commercial advice' across a range of transactions, including repackagings, total return swap structures and structured equity derivatives trades, which is underpinned by a very strong appreciation of the surrounding regulatory framework.

Practice head(s):

Yvonne Siew and Ross Stewart

Other key lawyers:

James Yao

Testimonials

‘The team offers real strength for derivatives.’

‘The team has a great mix of transactional and regulatory expertise with respect to OTC derivatives.’

‘Ross Stewart has deep market knowledge.’

‘Yvonne Siew is practical and commercial.’

Key clients

Australia and New Zealand Banking Group

Bank of America Merrill Lynch

Citi

DBS

Deutsche Bank

GIC

Goldman Sachs

HSBC

JP Morgan

Natixis

Standard Chartered Bank

Temasek

Westpac

Work highlights

  • The launch of a new proprietary product, Margin Xchange, which puts the entire initial margin negotiation process on to a single online platform.
  • Advised Goldman Sachs on the establishment of an SPV repackaging programme under which a wide variety of securities linked to different underlying asset classes.
  • Acted for the joint global coordinators and joint bookrunners on a landmark $450m bond transaction issued by Landmark Funding 2019 Limited to advance a $450m loan to Minsheng Hong Kong International Leasing Limited.
  • Advised the Macquarie Group on the establishment of its new structured note programme which now provides Macquarie with the capability of issuing a wide variety of product types from this entity in its group.
  • Advised Citibank Korea on the establishment of its new global MTN programme.

Clifford Chance

Led from Hong Kong by Francis Edwards and also able to leverage the expertise of practitioners throughout the region, including in Singapore and mainland China, Clifford Chance provides comprehensive coverage to clients across the gamut of complex derivatives, structured products and securitisation transactions and regulatory matters. Edwards regularly advises international investment banks and Chinese banks as issuers/arrangers of sophisticated products; he recently acted for Standard Chartered Bank in connection with a securitisation programme for its trade finance business (in what was the first-ever public trade finance securitisation involving only a single bank). Splitting his time between Hong Kong and Beijing, Terry Yang focuses on PRC-related work, from both a regulatory and transactional perspective. In addition to handling matters for PRC banks, Yang is also active on the buy-side for Chinese investors, who are appreciative, not only of his subject matter knowledge across the gamut of structured finance, but also his Mandarin-speaking capabilities. The team also provides regulatory advice to market infrastructure providers, including its recent work for the Hong Kong Stock Exchange on the regulatory and operational issues associated with the launch for trading of physically-settled Gold Futures contracts denominated in Offshore Renminbi and US Dollars.

Practice head(s):

Francis Edwards

Other key lawyers:

Terry Yang; James Pedley

Key clients

Standard Chartered Bank

Credit Suisse

Deutsche Bank

Goldman Sachs

Hong Kong Exchanges and Clearing

Work highlights

  • Acting for Standard Chartered Bank in connection with a securitisation programme for their trade finance business.
  • Acted for Deutsche Bank in connection with its existing exposure to the group and its ongoing role as major trade finance provider to the New Noble Group.
  • Advised the mandated lead arranger and underwriter on the refinancing of a $550m facility for Profit Reach International Limited (supported by a Put Option granted by China Cinda (HK) Holdings Company Limited).
  • Advised Credit Suisse on a $300m loan repackaging transaction and total return swap.
  • Advising Credit Suisse on the establishment of a new collateralised repackaging programme involving a Cayman incorporated SPV for the issuance of secured notes and other secured obligations.

King & Wood Mallesons

Benefiting 'from strong language abilities and profound technical knowledge', King & Wood Mallesons has excellent market credibility among  global and Asian financial institutions across a range of transactional and regulatory matters. Spearheaded from Hong Kong by the 'responsive and empatheticRichard Mazzochi and Minny Siu, and also benefiting from a strong footprint in mainland China, the team is best known for its work for issuers of listed and unlisted retail structured products – where clients appreciate its 'excellent technical knowledge of the industry'. The team also regularly provides support to the firm's market-leading Australia-based securitisation practice, particularly on matters where there is a nexus to Hong Kong. The team was strengthened in September 2019 by the arrival of counsel Jonathan Chapman from Allen & Overy.

Practice head(s):

Richard Mazzochi and Minny Siu

Other key lawyers:

Paul McBride; Jonathan Chapman

Key clients

International Swaps and Derivatives Association (ISDA)

The Stock Exchange of Hong Kong

The World Bank

International Finance Corporation

AustralianSuper

China Construction Bank

Guotai Junan Securities (Hong Kong) Limited

HSBC

Goldman Sachs Structured Products (Asia)

JP Morgan Structured Products

Haitong International Securities Company

Bank of New York Mellon

Huatai Financial Holdings (Hong Kong) Limited

China Minsheng Banking Corp.

BNP Paribas Arbitrage Issuance B.V

Work highlights

  • Working with ISDA on the production of a white paper on “China’s Derivatives Market and Judicial Trends”.
  • Advising Guotai Junan Securities (Hong Kong) on the establishment of an off-balance sheet secured note programme.

Linklaters

Acting on its own and as an integral part of the firm's pan-Asian group – which includes practitioners based in mainland China, Singapore and Tokyo –  Linklaters' Hong Kong practice provides 'technical and commercial advice' to many of the highest-profile international banks on the structuring of their most sophisticated derivatives, structured products and securitisation transactions. Benefiting from very deep local regulatory expertise and also able to leverage knowledge of the latest developments in Europe and the US, the team excels in bringing first of its kind, innovative products to market; it recently advised JP Morgan and Goldman Sachs as counterparties to the first “convertible bond with call spread overlay” transaction in Hong Kong. Chin-Chong Liew has expertise in the market across a range of OTC derivatives products and benefiting from a comprehensive knowledge of the regulatory framework has been instrumental in the development of derivatives products in China. The 'excellentVictor Wan advises investment banks, prime brokers and asset managers across a wide range of structured transactions, including credit, equity and fixed income derivatives, and cash and synthetic securitisations. The 'very experiencedAndrew Malcolm is well regarded in the market across listed and OTC-structured products and derivatives transactions, while 'technical and commercial' counsel I-Ping Soong is recognised as 'an expert on Hong Kong regulatory issues regarding derivatives'.

Practice head(s):

Chin-Chong Liew; Victor Wan; Mary Matson and Andrew Malcolm

Other key lawyers:

Stephen Song; Karen Lam; I-Ping Soong; Simon Zhang; Ryan Iskandar; Ying Zhou

Key clients

ISDA

Hong Kong Exchanges and Clearing

Industrial Bank

Bank of Communications

China CITIC Bank International

Value Partners

BNP Paribas

Shanghai International Energy Exchange

UBS

Work highlights

  • Advising a number of Hong Kong licensed corporations, including China International Capital Corporation, Haitong International Securities and China Merchant Securities, on proposed reforms to the licensing framework for OTC derivatives activities in Hong Kong, including the introduction of new regulated activities and forthcoming changes to the SFC Code of Conduct.
  • Advising Shanghai International Energy Exchange regarding issues in relation to its internationalisation and admissions of foreign members and investors including its registration as an Automated Trading Service  in Hong Kong and Recognised Market Operator in Singapore.
  • Advising numerous global banks (Citibank, Morgan Stanley, Societe Generale, HSBC, DBS) on the important issue of close out netting of derivatives transactions against Chinese counterparties.
  • Advising OTC Clearing Hong Kong Limited (a subsidiary of HKEX) on admitting Chinese banks as a clearing member and introducing client clearing services as well as the provision of non-cash collateral by these Chinese banks.
  • Representing JP Morgan and Goldman Sachs as counterparties to call spread transactions entered into by Smart Insight International Limited (a subsidiary in the Country Garden group) in connection with its HK$7.83bn issuance of  bonds.

Ashurst

Regularly working alongside practitioners in mainland China, Tokyo and Singapore, Ashurst excels in handling multi-jurisdictional work for international and regional banks across structured products and OTC derivatives. Peter Kwon is 'very well regarded by issuers', which are appreciative of his 'in-depth knowledge of the latest product and market developments', particularly as it relates to securitisation matters. Although he has knowledge and is active in transactions throughout Asia, Kwon has particular expertise in relation to handling South Korean-related matters. 'Responsive and user-friendly' team head Nigel Pridmore is also 'very knowledgeable and experienced in the structured finance space', particularly as it relates to repackaging matters.

Practice head(s):

Nigel Pridmore

Other key lawyers:

Christopher Whiteley; Peter Kwon; Christopher Tang; Richard Poon

Testimonials

‘Their combination of expertise, competitive pricing and client-friendly approach is unique.’

‘The very hands-on Peter Kwon is a true specialist in the area.’

Key clients

Bank of China

BNP Paribas

China Everbright Bank

Commerzbank

Credit Suisse

Goldman Sachs

Guotai Junan Securities

HSBC

ICBC International

Natixis

Work highlights

  • Advising a consortium, made up of Hong Kong’s most influential families, on hedging arrangements in relation to a $4.1bn bond financing, to facilitate the acquisition of Hong Kong skyscraper The Center.
  • Advised BNP Paribas,  as arranger and dealer in respect of Series M890 JPY1,000,000,000 Repackaged Standard Chartered PLC Notes due 2022 issued by MARC Finance Limited under its EUR 50,000,000,000 Structured Note Programme.
  • Advising Natixis as hedge counterparty, and transferee of additional hedging, on the $1bn refinancing of the acquisition and construction costs of the Gumusut Kakap semi- submersible floating production system, Shell’s first deep water platform in Malaysia.
  • Advising Natixis as hedge counterparty in relation to the financing of a wind farm at Yunlin in Taiwan.
  • Advised SMBC Nikko as arranger in relation to the establishment of its new Multi Issuer Limited Recourse Secured Note Programme.

Latham & Watkins LLP

Led by Posit LaohaphanLatham & Watkins LLP is 'very well regarded' by financial institutions in their role as underwriters on complex capital markets and derivatives transactions. Laohaphan is particularly noted for his ability to structure innovative and highly bespoke mandates, including his recent work for the underwriters in relation to China Shipbuilding Industry Corporation’s issuance of $1bn zero-coupon exchangeable bonds linked to Postal Bank of China's stock. This mandate was particularly noteworthy by dint of its unique structuring, which relied on an orphan special purpose vehicle issuer to achieve off-balance-sheet treatment for the bonds while ensuring that bondholders are protected from the credit risks of the SPV issue. In addition to the firm's equity-linked derivatives expertise, the team also has has a  particular niche in relation to margin lending.

Practice head(s):

Posit Laohaphan

Other key lawyers:

Derek Chua; Raymond Cheng

Testimonials

The best firm to engage on equity corporate derivatives over US listed Chinese names.

The team is very responsive, knowledgeable and provides the best advice of the street on security backed lending transactions.

Posit Laohaphan is very commercial and knowledgeable on US listed Chinese names. I consider him and his team being the best on the street on share-backed financing over US names.

Key clients

BNP Paribas

CLSA Limited

Shandong Ruyi Technology Group

Credit Suisse (USA) LLC

J.P. Morgan Securities LLC

Morgan Stanley & Co. LLC

Goldman Sachs (Asia) LLC

Merrill Lynch, Pierce, Fenner & Smith Incorporated

Citigroup Global Markets Inc.

Deutsche Bank Securities Inc.

UBS Securities LLC

WR Securities, LLC

Citicorp International Limited

Credit Suisse (Hong Kong) Limited

Work highlights

  • Advised BNP Paribas and CLSA Limited on the $1bn Zero Coupon Exchangeable Bonds due 2025 issued by Poseidon Finance 1 Ltd. (the SPV Issuer) and exchangeable into ordinary shares of Postal Savings Bank of China Co.
  • Advised the underwriters on the issuance by Nio Inc. of $650m in aggregate principal amount of convertible senior notes due 2024, with a 30-day option to purchase up to an additional $100m in principal amount of the Notes.
  • Advised the underwriters on the issuance by Bilibili Inc. of $430m in aggregate principal amount of convertible senior notes due 2026, with a 30-day option to purchase up to an additional $70m principal amount of the Notes.
  • Advised the underwriters on the issuance by Baozun Inc. of $225m in aggregate principal amount of convertible senior notes due 2024, with a 30-day option to purchase up to an additional $50m in principal amount of the Notes.
  • Advised the underwriter on the issuance by China Education Group Holdings of convertible bonds in an aggregate principal amount of HK$2.35bn.

Dentons Hong Kong

Led by US-qualified partner Jeff Chen and aided when necessary by practitioners from the corporate finance team, Dentons Hong Kong handles limited recourse and cross-border financing structures of all types, including asset-backed securities and asset-backed loans.

Practice head(s):

Jeff Chen

Other key lawyers:

Gordon Ng; Man Chiu Lee; Enoch Wong; Nic Yau

Key clients

Huayuan Property Co.

Work highlights

  • Advised Huayuan Property Co in its global offering of $300m high yield notes with an interest rate of 8.5% due 2021 issued on March 27, 2019.
  • Advised Huayuan Property Co in its global offering of $200m high yield notes with an interest rate of 11.0% due 2021 issued on November 16, 2018.  

Eversheds Sutherland

Led by Kingsley OngEversheds Sutherland's one-partner team has a strong track record for arrangers, issuers and investors in the Asian market across the spectrum of structured finance, securitisation and derivatives transactions. Ong has also successfully positioned himself as one of the pre-eminent practitioners in the market for unwinding complex structured products in the context of insolvency proceedings. Associate Polly Chiu is also recommended.

Practice head(s):

Kingsley Ong

Other key lawyers:

Polly Chiu; Simon Barrell

Key clients

Axis Bank

CMB International Finance

China Merchants Securities

E-Land Group

Fitch Ratings

GDS Holdings

Hong Kong Capital Finance Corporation

HSBC

KPMG (as Hong Kong liquidators of Lehman Brothers and MF Global)

Meritz Securities

Oceanwide Holdings

Taipei Sky Tower Developer Group

WeLend Group

Work highlights

  • Acted for WeLend Group as originator and servicer of a complex Hong Kong consumer loan receivables securitisation, with triple tranching.
  • Advising Taipei Sky Tower Developer Group on the structured financing of Taipei Sky Tower.
  • Advised CMB International Finance as arranger, facility agent, security trustee and lender in connection with a structured financing to LVGEM (China) Real Estate Investment Company (a real estate developer and commercial property operator in Shenzhen).
  • Acted for Hong Kong Capital Finance Corporation as arranger in a high-value Hong Kong mortgage securitisation warehouse transaction with Korean bondholders.
  • Advised Meritz Securities on a Korean structured financing transaction secured by ultra-high value residential properties in Hong Kong.

K&L Gates

Led by Philip Hyde K&L Gates advises a range of clients on the buy and sell-side across a wide array of OTC derivatives, including credit, equity, interest rate, currency, energy, and commodities swaps, options, futures, forwards, repos, and synthetic investments. In addition, Hyde is also well-versed at handling securitisation matters across a broad scope of asset classes  including non-performing loans, consumer loans, credit card loans, auto loans, shopping credit loans, commercial and residential mortgages.

Practice head(s):

Philip Hyde

Key clients

Citicorp International

Work highlights

  • Acting for trustee, security trustee and settlement agent on $1bn 4.625% Senior Notes due 2029 issued by Resorts World Las Vegas LLC and RWLV Capital Inc.
  • Acting for trustee and settlement agent on $100m 10.0% Senior Notes due 2020 issued by Glory Land Company Limited.
  • Advised trustee and settlement agent on $150m 11% Senior Notes due 2020 issued by Hejun Shunze Investment Co., and guaranteed by Sichuan Languang Development Co.,Ltd. to be consolidated and form a single series with the $250m 11% Senior Notes due 2020 issued on September 20, 2018.
  • Acting for trustee and settlement agent on $100m 7.50% Guaranteed Bonds due 2020 issued by New Dian Group Pte. Ltd. and guaranteed by Kunming Iron & Steel Holding Co., Ltd.

Mayer Brown

Mayer Brown's Hong Kong office forms a vital part of the firm's global offering for financial institutions, corporates and trustees engaged in complex derivatives and structured finance matters. 'Experienced and resourceful' team head Vincent Sum is qualified in Hong Kong, UK and New York, enabling him to provide an excellent global perspective for Asian clients on multi-jurisdictional capital markets mandates, including equity and commodities derivatives, and securitisations.

Practice head(s):

Vincent Sum

Other key lawyers:

James Tsang

Tiang & Partners

Spearheaded by Michelle Taylor , following her arrival in 2018 from Jones Day, the nascent team at Tiang & Partners has strong ties with numerous financial institutions which have instructed Taylor during her many years' experience handling structured finance and securitisation transactions in the Asia Pacific region. Although she is active across the panoply of asset classes in relation to securitisation matters, Taylor has a particularly strong track record handling Korean-related credit card receivable transactions.

Practice head(s):

Michelle Taylor

Other key lawyers:

Kevin Tsang

Testimonials

‘The partner is heavily involved throughout.’

‘Michelle Taylor is the best English law attorney for Korean cross-border ABS.’

‘The structured finance team have white shoe law firm experience so punch above their weight in the market. Knowledge of Korean cross-border securitisation market is second to none.’

‘Michelle Taylor – excellent relationship partner; thorough and a pleasure to deal with.’

Key clients

Daiwa Securities

DBS Bank

Mizuho Securities

Standard Chartered Bank

Citicorp International

Work highlights

  • Advised DBS Bank as the arranger of the offering of asset-backed notes arising from the securitisation of certain credit card receivables originated by Shinhan Card.
  • Advising Citicorp International in various roles (trustee, agent, registrar) in connection with a synthetic credit-linked note issuance by Standard Chartered Bank (Sealane IV).
  • Advising Citicorp International in various roles (note trustee, security trustee, agent, registrar) in connection with a synthetic credit-linked note issuance by Standard Chartered Bank.
  • Acted as counsel to the syndicate of arrangers, swap providers and note trustee of a securitisation of future ticket receivables for Korean Air Lines.