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A&O advises Yorkshire Building Society on GBP2 billion social RMBS

Allen & Overy has advised Yorkshire Building Society (YBS) on one of the first social residential mortgage backed securitisations (RMBS), structured in line with the social bond principles included in the ICMA’s social bond guidelines.

The social RMBS is only the second in the market and is worth over GBP2 billion, made up of USD300 million Class A1 notes, GBP264 million Class A2 notes, GBP1 billion Class A3 notes and a GBP450 million Class Z variable funding note.

Social bond principles include social projects that provide or improve access to banking services and/or socioeconomic advancement and empowerment through home loan finance, with YBS developing and defining a formal approach for its social bond framework which looks to incorporate such principles.

Commenting on the transaction, Sally Onions, partner, said: “We were very pleased to assist Yorkshire Building Society in this matter. While transactions of this nature are currently quite rare I anticipate that in the coming months, we will start to see more securitisations structured with the social bond principles in mind.” 

A&O actied as legal advisers to the Seller, the Issuer and the Servicer as to English law and New York Law. The London team was led by Partner Sally Onions with assistance from Dan Hill, Graeme MacDonald and Sarty Sengupta. The New York team was led by Partner John Hwang with assistance from Joshua Kopel and Ari Yannakogeorgos.