Last month saw the first transaction under the new Irish asset covered securities legislation and, at the same time, the fruits of the 2002 restructuring of the German Depfa banking group.

That restructuring, which was by means of a demerger of Depfa's public sector finance business and its property business, was the first to be achieved by way of a court-approved capital reduction in Ireland. Each of the two banks that the demerger created – Depfa Bank (an Irish incorporated and resident company) to conduct the public sector business and Aareal Bank (which remains a German entity) to conduct the property business – listed on the Frankfurt Stock Exchange in 2002.

This year McCann FitzGerald advised a subsidiary of Depfa Bank on the structuring and execution of the first issue of asset covered securities under the Irish Asset Covered Securities Act 2001, on 6 March. The 2001 legislation, in the development of which McCann FitzGerald was also involved closely, was enacted to facilitate the issue by designated credit institutions of debt securities secured on pools of public credit or mortgage assets, those assets and securities then being ring-fenced from the relevant institution's other creditors.