X-class loan notes and avoiding moral hazard

X-class loan notes and avoiding moral hazard

In Credit Suisse Asset Management LLC v Titan 2006-1 Plc the Court of Appeal rejected an attempt by Class X noteholders to claim an increased proportion of the available income when the underlying loans were in substantial default. In this article, Nicola Rushton considers why this might have been and how the rewards to the originator might better be aligned with those for the investors.

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About the author:

Neeta 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 paralegal experience.

Neeta also did a short stint in litigation at the Revenue and Customs Prosecutions Office in 2006. 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. She has been working at Lexis Nexis since April 2013.