News & Announcements

Weil Advises Citigroup on Securitization of Personal Loans

A Weil team, led by New York partner Frank Nocco, advised Citigroup (Citi) as lead initial purchaser in Springleaf Finance Corporation’s (Springleaf) $604.3 million ABS bond offering backed by personal consumer loans. The transaction is Springleaf’s first-ever securitization of personal loans (many of which are unsecured) and the first rated ABS offering of this type since 1998.

Springleaf, the consumer lending joint venture of private equity firm Fortress Investment Group LLC and insurer American International Group Inc., has been phasing out its residential mortgage loan business and focusing on its personal loan, retail sales finance, and insurance businesses. So long as certain portfolio criteria are satisfied, the transaction is permitted to revolve, allowing Springleaf the flexibility to continue to operate its personal loan business while protecting bondholders from portfolio degradation. Additionally, Wells Fargo serves as back-up servicer and is available to service the personal loans in the event of a servicer default.

The New York-based Weil team advising Citi was led by Frank Nocco, head of the firm’s Structured Finance and Derivatives practice, and included Structured Finance and Derivatives associates Alexander Swartz and Justin C. Lee.

This is not the first instance in which Weil advised on a groundbreaking offering by Springleaf. In 2010, we advised Springleaf, then known as American General Finance Corporation, on its $717 million issuance of pass-through certificates collateralized byapproximately $1 billion of first-lien residential mortgage loans – the first issuance of non-GSE rated residential mortgage backed securities consummated since the financial crisis hit in 2007. This transaction was awarded “Securitization and Structured Finance Deal of the Year” by IFLR Americas in 2011.

Weil’s Structured Finance and Derivatives group is uniquely positioned to address the legal needs of clients in the securitization market and has a long track record of developing innovative, cutting-edge structures at the forefront of the marketplace. We were awarded “Securitization and Structured Finance Deal of the Year” in 2011 and “Securitization and Structured Finance Team of the Year” in 2010 by IFLR Americas, and we have earned the distinction of having two transactions named “Deal of the Year” by the Asset Securitization Report: the first, the groundbreaking $5.9 billion rental car fleet securitization consummated in connection with the LBO of the Hertz Corporation, and the other involved the firm’s representation of Morgan Stanley & Co. in BlackRock Financial Management’s Tourmaline CDO, the first hybrid CDO structure in the U.S. market.