Disclosure in offering circulars

Disclosure in offering circulars

This analysis discusses the issues raised in Credit Suisse Asset Management LLC v Titan Europe 2006-1 Plc and others with regards to interest payments made in relation to Class X Notes.

Original news

Credit Suisse Asset Management LLC v Titan Europe 2006-1 Plc and others

[2016] EWHC 969 (Ch)

What were the facts of the case?

Four sets of proceedings concerned the proper interpretation of Notes in a securitisation structure. Each structure involved the securitisation of loans secured on commercial properties. The issues raised in each of the four proceedings relate to payments due on the Class X Notes of the series. The proceedings are against a background of extensive default on the loans.

The claimant in the four sets of proceedings was Credit Suisse Asset Management LLC (CSAM), the investment manager of a fund which held the Class X notes in the structure and represented the interests of the investors in that fund.

The Class X notes were intended to provide what has been described by some of the parties (other than CSAM) as a 'fee' for the originator and lead manager rather than a return on the capital value of the Notes. The initial principal of the Notes was a nominal amount of €50,000 which was paid into a segregated account (the Class X Account). The Class X principal was secured by a first charge on the Class X Account. The Class X Notes bore interest at the 'Class X Interest Rate' which ranged from 9.024% to 114.508%. The cash management agreement set out the waterfall for payments—first in order of payment was interest due or overdue and payable on the Class A and Class X Notes. The waterfall did not contain any reference to Class X principal because that was to be paid from the Class X Account.

Four issues were raised in relation to interpreting the documents:

  • when calculating the Class X Interest Rate,

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About the author:

Neeta has been working as a paralegal in Banking and Insolvency for the past 4 and a half years.

She started her legal career at Allen & Overy in 2008 in the midst of the global financial crisis and the collapse of Lehmans where she gained most of her experience.

Neeta also did a short stint in litigation at the Revenue and Customs Prosecutions Office. Neeta graduated with a 2:1 honours degree from University of London, Queen Mary College and went on to obtain a distinction from the College of Law in the Legal Practice Course. She moved to Lexis®PSL in April 2013.