Clifford Chance

Clifford Chance advises Fannie Mae on Connecticut Avenue Securities Risk Transfer Program

International law firm Clifford Chance has advised Fannie Mae on a potential new structure for its benchmark Connecticut Avenue Securities^TM (CAS) credit risk transfer program, which is expected to expand the investor base for CAS securities by addressing certain tax constraints that currently exist for REITs and foreign investors.  Under the proposed new structure, the CAS notes would be issued by a trust that qualifies as a Real Estate Mortgage Investment Conduit (REMIC), and the CAS notes offered under the new structure will qualify as REMIC regular interests for federal income tax purposes.  To date, Fannie Mae has issued over US$22 billion in CAS notes, and transferred to private investors a portion of the credit risk on single-family mortgage loans with an original unpaid principal balance of over US$750 billion.

Tax partner Will Cejudo has led this representation, along with assistance from Tax associate Steven Pahuskin. 

Clifford Chance regularly advises participants in the RMBS and CMBS markets, bringing novel ideas to tax challenges that arise in capital markets transactions.