Hogan Lovells advises Zopa on first AAA rated marketplace lending securitisation deal
December 2019 – Hogan Lovells has advised Zopa Limited on a public securitisation of a portfolio of UK consumer loans. Globally this is the first AAA rated marketplace lending securitisation.
The transaction is intended to comply with the criteria for simple, transparent and standardized (STS) securitization transactions under the Securitisation Regulation which has applied since 1 January 2019. STS was introduced under the Capital Markets Union with the aim of revitalizing the European securitization market. Compliance with the STS criteria was verified in draft form by PCS.
Zopa Limited acts as platform servicer and legal title holder in respect of the transaction, which involves the sale of the portfolio held in an SPV warehouse. Zopa provides certain representations and eligibility criteria in respect of the portfolio originated through it. The transaction is arranged by Deutsche Bank and the lead managers are Deutsche Bank and Standard Chartered Bank. M&G Specialty Finance (Luxembourg) No.1 Sarl and Prudential Loan Investments 1 Sarl (the Retention Holders) acted as originators.
The Hogan Lovells team was led by finance partner Julian Craughan with support from counsel David Palmer.
Commenting on the deal, David said, "We are delighted to have supported Zopa on this UK STS designated consumer loan transaction. This deal underscores the trend we see in the market towards applications for STS designations on many different asset types."