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Allen & Overy on the first asset-backed financing of residual value claims arising from auto financial leases

Allen & Overy has assisted a leading German automotive group in an asset-backed financing of residual value claims arising from financial leases entered into by the Italian captive financial company with its clients.

This is the first financing of this kind known in the Italian market. The residual value claims are funded on a revolving basis in the context of an innovative ring-fenced securitisation structure under which an Italian special purpose vehicle has issued variable funding notes to disburse limited recourse loans to the originator. The senior notes have been underwritten by two senior funders, whilst the junior notes are retained by the originator.

The transaction has been structured to meet “simple, transparent and standardised” securitisation requirements under Regulation (EU) 2402/2017. STS Verification International GmbH has acted as third party verification agent.

Allen & Overy has advised on the transaction with a team led by partner Stefano Sennhauser and counsel Pietro Bellone, with the support of associates Chiara D’Andolfo and Martina Gullino. Partner Francesco Guelfi, with senior associate Elia Ferdinando Clarizia and associate Simona Simone, has dealt with the tax aspects of the securitisation.