Clifford Chance Badea has advised Alpha Bank Romania in relation to the first covered bond program established in Romania, for the amount of EUR 1 billion. RTPR Allen & Overy advised Barclays Bank PLC as arranger on the program, which comes three years after the Romanian covered bond law entered into force.
According to Clifford Chance, "covered bonds bring several benefits for both issuers and investors – the possibility of obtaining high credit rankings and ensuring access to a large pool of potential investors (from the issuers' point of view), more accessible investment thresholds, favorable regulatory capital treatment for credit institutions, and the possibility to use this type of financial instruments as collateral for obtaining financing from central banks (for investors)."
"This transaction enriches the Romanian capital market with a new financial instrument allowing credit institutions to attract liquidities based on their credits portfolio," commented Clifford Chance Counsel Radu Ropota, who worked on the deal. "It represents the result of the collective effort of putting into practice the legislation prepared together with the Romanian Association of Banks and the National Bank of Romania. This effort has seen its challenges, given the complexity of the transaction, which included the alignment of all contractual mechanisms so that prerogatives of all parties involved may still apply – the issuer, the asset monitor, the covered bondholders representative."
"Another challenge in implementing the transaction was related to aligning the legal frame applicable in Romania to international market standards governing the covered bonds issues and the capital market in general," added Clifford Chance Associate Georgiana Evi, who worked alongside Ropota on the deal..
Clifford Chance reports that its team, which was led by Partner Madalina Rachieru and included Ropota, Evi, and Associate Yolanda Ghita-Blujdescu, "advised the bank throughout the entire process, starting with legal assistance in the preparation and finalization of the prospectus, negotiation of documentation related to the bonds program, approval of the prospectus by the Commission de Surveillance du Secteur Financier, and preparation of the listing process on the Luxembourg and the Bucharest Stock Exchanges."
The RTPR Allen & Overy team was led by Partner Victor Padurari and Counsel Andreea Burtoiu and included Managing Associate Andreea Chiriac and Associates Lia Ilie and Ioana Ilie.