International law firm Simmons & Simmons has advised MUFG Securities EMEA plc on structuring and financing the Buy to Let Purchase Plan partnership between Gatehouse Bank plc and ColCap Financial UK Limited and related sukuk securitisation – a market leading transaction in an area that is becoming of increasing focus in the UK.
The transaction was structured to comply with both the Alternative Finance Tax Rules, as well as Shariah principles, requiring material structural amendments when compared to a warehouse financing of conventional mortgage loans.
Key considerations included how to structure the transaction to preserve the availability of existing stamp duty land tax and Welsh land transaction tax alternative finance reliefs – considering the position of the underlying customer, the provider issuer and any future buyer of the portfolio including with an eye to potential public take-out. Also central was ensuring the security package and related enforcement rights were sufficiently flexible, despite the complex structuring.
Leveraging off the previous work Simmons has done in this space for StrideUp (an originator of Home Purchase Plans in the UK) and residential mortgage-backed securities (RMBS) structuring in the Middle East, the team looks forward to future developments in this space, including securitisations of other types of Shariah-compliant home finance products.
The transaction was led by Kathryn James, securitisation and asset-backed finance partner in the Structured Finance and Derivatives team in London, and Martin Shah, Corporate Tax partner in London. They were supported by associates Matthew Caley and Edward Hardy.
