Thursday 31 December 2020

Delta and United Securitization Deals

Fitch Ratings has a nice discussion of the securitization deal concerning Delta Airlines and its mileage program around September 2020.  Here is a description of the deal:

The transaction is backed by payments to be made to SMIP under a license agreement signed with Delta for the use of the SkyMiles Intellectual Property (IP) assets and backed by co-brand agreements with third parties for the purchase of SkyMiles. SMIP, as owner and licensor of the IP, licenses the IP to SMIF which then sublicenses the IP to Delta. Through the license agreements, SMIP grants a worldwide license to Delta and its subsidiaries to use the IP to operate the loyalty program, SkyMiles. The licensees then pay a monthly license fee equivalent to all the cash collections generated by sale of miles to Delta as governed through an Intercompany Agreement. Additionally, the third-party agreements will be assigned to SMIP and payment for the purchase of SkyMiles from third parties will be remitted directly to a collection account held at JP Morgan Chase Bank, N.A. in the name of SMIP. These agreements include the co-brand agreement and membership reward agreement with American Express, the largest third-party partner.

The senior secured financing will be guaranteed, on a joint and several basis by certain subsidiaries under Delta. Additionally, the issuers grant additional security to the lenders/bondholders, including a first priority perfected security interest in the cash flows from the SkyMiles program, a pledge of all rights under contracts/agreements related to the SkyMiles program, a pledge of the transaction accounts (including the collection, payment and reserve accounts) and a pledge over the equity interests in certain subsidiaries of Delta.

There’s also a very interesting discussion of Covid-19 and the creditworthiness of Delta Airlines.  Notably, United entered into a similar agreement earlier in the year.  Details concerning that deal are available, here. 

Wednesday 23 December 2020

Trademark Royalty Securitization Deal with Vanderbilt University

In 2019, Global Capital gave Goldman Sachs an award for most innovative securitization deal.  The deal concerned the securitization of royalty payments from a license between Vanderbilt University and Vanderbilt University Medical School.  The deal apparently provided Vanderbilt University funding raising its endowment by 30%.  More details are available, here, in an article by Max Adams.  In 2018, Vanderbilt University had an endowment around US $4.6 billion. 

Tuesday 22 December 2020

Copyright Parts of Covid-19 Relief Bill

Well, I guess because they could: The Hollywood Reporter has some of the details concerning 10 years in prison for illegally streaming and small claims copyright administrative bodies parts of the Covid-19 relief bill.  And, the immediate deduction for TV and movie production expenses gets extended.  Never let a crisis escape without taking advantage of it. 

Thursday 3 December 2020

Robust Funding for Regenerative Medicine in 2020

The Alliance for Regenerative Medicine has released data on financing for regenerative medicine and it is at a record pace for 2020.  In the first three quarters of 2020, worldwide financing has reached almost $16 billion and exceeded the top prior year of 2018 already ($13.5 billion).  The report includes a breakdown based on amounts for types of regenerative medicine as well as private, public and partnership funding. The report is a short two pages or so and available, here