Credit Suisse Asset Management LLC v Titan Europe 2006-1 PLC & Ors

Credit Suisse Asset Management LLC v Titan Europe 2006-1 PLC & Ors

The phrase 'per annum interest rate' in the definition of Net Mortgage Rate refers to the ordinary rate of interest payable on the underlying loans, exclusive of any element of default interest. Default interest is not to be included in calculating the Class X Interest Rate. This interpretation is supported by the...

Source-derived case information.

Parties
Appellant: Credit Suisse Asset Management LLC; 1st Respondent: Titan Europe 2006-1 P.L.C.; 2nd Respondent: U.S. Bank Trustees Limited; 3rd Respondent: Elavon Financial Services Limited; 4th Respondent: Attestor Value Master Fund LP; 1st Respondent: Titan Europe 2006-2 P.L.C. / Cornerstone Titan 2007-1 P.L.C. / Titan Europe 2007-2 Limited
Jurisdiction
England and Wales
Judgment Date
20 December 2016
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
Interpretation of Contract Terms, Commercial Mortgage Backed Securitisation, Priority of Payments, Interest Entitlement, Default Interest
Commercial Law Contract Law Banking and Finance Interpretation of Contract Terms Commercial Mortgage Backed Securitisation Priority of Payments Interest Entitlement Default Interest

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Parties

Credit Suisse Asset Management LLC

Appellant

Titan Europe 2006-1 P.L.C.

1st Respondent

U.S. Bank Trustees Limited

2nd Respondent

Elavon Financial Services Limited

3rd Respondent

Attestor Value Master Fund LP

4th Respondent

Titan Europe 2006-2 P.L.C. / Cornerstone Titan 2007-1 P.L.C. / Titan Europe 2007-2 Limited

1st Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether 'per annum interest rate' in the Class X Notes includes default interest
  2. 2 Interpretation of contractual terms in CMBS documentation

Ratio Decidendi

The phrase 'per annum interest rate' in the definition of Net Mortgage Rate refers to the ordinary rate of interest payable on the underlying loans, exclusive of any element of default interest. Default interest is not to be included in calculating the Class X Interest Rate. This interpretation is supported by the language of the documentation and commercial logic, as rewarding Class X Noteholders for borrower default is counter-intuitive and not intended by the parties.

Court Disposition

Appeal dismissed

Orders

  • Default interest is not included in the calculation of Class X Interest Rate.
  • Class X Noteholders are entitled only to ordinary interest as defined in the documentation.