PORTUGAL Law and Practice Contributed by: Benedita Aires and Orlando Vogler Guiné, VdA
In multi-transaction SPEs (which is the case for STCs), such parties are not entitled to claim pay - ments from the SPE out of its general estate, nor to claim out of other autonomous and seg - regated pools of assets backing other securiti - sations. This means that each pool of assets is only available to meet the liabilities arising from the respective securitisation transaction and, moreover, that the liabilities of any given securitisation transaction can only be satisfied by its respective autonomous pool of assets. In addition, there is a special creditor’s privileged entitlement (the strongest possible form of secu - rity provided by law) protecting the interests and payment rights of such parties in these situa - tions – ie, securing the liabilities of the creditors of a given securitisation transaction. Finally, it should be noted that the autonomous pool of assets is codified and granted an asset digit code by the competent regulator (the CMVM), which allows for the identification of the pool at any given time by the respective credi - tors. The insolvency analysis is a typical component of legal opinions issued in the context of securiti - sations, which details and analyses the above- discussed insolvency protections. This analysis should be (and normally is) carved out from the ordinary insolvency law qualification included in such legal opinions. Opinions normally also include a reference to searches undertaken in the relevant courts, and/or regulatory authori - ties’ confirmation that at the time of assignment there were no insolvency proceedings pending against the originator in the competent courts. 6.2 SPEs A regulated SPE is typically used in a securiti - sation, as noted in 6.1 Insolvency Laws . The Securitisation Law provides for two possible
SPE types, which both come under the super - vision of the CMVM (the local securities mar - ket regulator). Accordingly, the assignee’s SPE in a securitisation may be an FTC or an STC. The creation of any such SPE is subject to prior authorisation from the CMVM, and the securiti - sation (the transaction) itself is also subject to the CMVM’s approval. FTCs An FTC is an autonomous pool of assets without separate legal personality (ie, a unit trust-like for - mat). For this reason, it is required to have a fund manager (ie, a securitisation funds management company – an SGFTC); such entities have been authorised and supervised by only one regula - tor (the CMVM) since 1 January 2020. An FTC must also have a custodian (an authorised credit institution), which is mandated to hold its assets. Certain share capital and minimum own funds requirements apply to both entities. When an FTC structure is used, securitisation units are issued, each representing a similar undivided ownership interest in the FTC. The legal rationale would be for these to be issued directly to investors. However, since the units are qualified as equity instruments, this would be detrimental for many investors (particularly regulated investors, notably due to equity instru - ments consuming more regulatory capital than debt instruments). Accordingly, in the Portu - guese market, and in cases where these struc - tures have been used in the past (some of which are still outstanding transactions), a double SPE structure has been used. An orphan SPE would usually be set up in another jurisdiction (for tax reasons) – normally Ireland or Luxembourg – and would acquire all the units and then issue notes to investors backed by such units (and indirectly by all the FTC’s assets). This type of structure also involved additional costs and normally
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