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Exhibit 5.1
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[Dewey Ballantine LLP]
July 25, 2000
To the Addressees Listed
on Schedule I Hereto
Re: Morgan Stanley ABS Capital I Trust 2000-1,
Mortgage Loan Asset-Backed Notes, Series 2000-1; and
Morgan Stanley ABS Capital I Trust 2000-N,
Asset-Backed Notes, Series 2000-1N
Ladies and Gentlemen:
We have acted as special counsel to Morgan Stanley ABS Capital I,
Inc. ("MSABS" or the "Depositor") in connection with the execution and delivery
of the following documents:
(i) the Trust Agreement, dated as of July 1, 2000, and the Amended
and Restated Trust Agreement, dated as of July 1, 2000 (together, the
"REMIC Trust Agreement"), between the Depositor and Wilmington Trust
Company, as owner trustee (the "Owner Trustee");
(ii) the Indenture, dated as of July 1, 2000 (the "REMIC
Indenture"), between Morgan Stanley ABS Capital I Trust 2000-1 (the "REMIC
Trust") and Bankers Trust Company of California, N.A., as indenture
trustee (the "Indenture Trustee"), relating to the issuance of the Class A
Notes, the Class M-1 Notes, the Class M-2 Notes, the Class B-1 Notes, the
Class C Notes, the Class S Notes and the Class P Notes (collectively, the
"REMIC Notes");
(iii) the Trust Agreement, dated as of July 1, 2000 (the "NIMS Trust
Agreement"), between the Depositor and the Owner Trustee;
(iv) the Indenture, dated as of July 1, 2000 (the "NIMS Indenture"),
between Morgan Stanley ABS Capital I Trust 2000-1N (the "NIMS Trust") and
the Indenture Trustee, relating to the issuance of the Class N Notes (the
"Class N Notes" and, collectively with the REMIC Notes, the "Notes");
(v) the Assignment and Bill of Sale, dated as of July 1, 2000 (the
"Assignment"), between Morgan Stanley Dean Witter Mortgage Capital Inc.,
as seller (the "Seller"), and the Depositor;
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To the Addressees Listed
on Schedule I Hereto;
July 25, 2000;
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(vi) the Sale and Servicing Agreement, dated as of July 1, 2000 (the
"Sale and Servicing Agreement"), among the Depositor, the REMIC Trust, the
NIMS Trust, Long Beach Mortgage Company ("Long Beach"), as originator and
master servicer (in such capacity, the "Master Servicer"), and the
Indenture Trustee;
(vii) the Underwriting Agreement, dated July 14, 2000 (the
"Underwriting Agreement"), between the Depositor and Morgan Stanley & Co.
Incorporated, as representative of the Underwriters (the
"Representative");
(viii) the Purchase Agreement, dated July 14, 2000 (the "Purchase
Agreement"), between the Depositor and Morgan Stanley & Co. Incorporated,
as initial purchaser (the "Initial Purchaser"); and
(ix) the Indemnification Agreement, dated July 14, 2000 (the
"Indemnification Agreement"), between the Depositor and Long Beach.
Capitalized terms used herein, but not defined, shall have the
meanings assigned to them in the Sale and Servicing Agreement.
We have examined executed copies of each of the above referenced
agreements (collectively, the "Documents"). We have also examined (i) the
Registration Statement No. 333-64909, as heretofore amended (the "Registration
Statement"), (ii) the Prospectus, dated December 21, 1998, (iii) the Prospectus
Supplement, dated July 21, 2000, relating to the Class A Notes (such Prospectus
and Prospectus Supplement being referred to together as the "Prospectus"), (iv)
the Private Placement Memorandum, dated July 21, 2000 (the "Mezzanine PPM"),
relating to the Class M-1 Notes, the Class M-2 Notes and the Class B-1 Notes and
(v) the Private Placement Memorandum, dated July 25, 2000 (the "NIMS PPM"),
relating to the Class N Notes. We have also examined a copy of each of the
executed Notes.
We have also examined originals or photostatic or certified copies
of all such corporate records of MSABS and such certificates of public
officials, certificates of corporate officers, and other documents, and such
questions of law, as we have deemed relevant and necessary as a basis for the
opinions hereinafter expressed. As to certain issues of fact material to the
opinions expressed herein, we have, with your consent, relied to the extent we
deemed appropriate upon certificates and representations of officers of MSABS.
In making our examinations and rendering the opinions herein expressed, we have
made the following assumptions:
(1) each party to each of the Documents (other than MSABS) has the
corporate power to enter into and perform all of its obligations
thereunder;
(2) the due authorization, execution and delivery of the Documents by
all parties thereto (other than MSABS) and the validity and binding
effect on all parties (other than MSABS) of each of the Documents,
as applicable;
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To the Addressees Listed
on Schedule I Hereto;
July 25, 2000;
Page 3
(3) the genuineness of all signatures;
(4) the authenticity of all documents submitted to us as originals and
the conformity to originals of all documents submitted to us as
copies;
(5) the REMIC Trust consisting of the Mortgage Loans will qualify as a
"real estate mortgage investment conduit" ("REMIC") as defined in
Section 860D of the Internal Revenue Code of 1986, as amended (the
"Code"); and
(6) the REMIC Notes will constitute "regular interests" in the REMIC, as
such term is defined in Section 860G(a) of the Code.
The opinion expressed in paragraph 3 with respect to the
enforceability of certain agreements are subject to the following additional
qualifications:
(a) the effect of bankruptcy, insolvency, reorganization,
moratorium, receivership, or other similar laws of general applicability
relating to or affecting creditors' rights generally or the rights of
creditors of national banking associations in the event of bankruptcy,
insolvency, reorganization, moratorium or receivership; and
(b) the application of general principles of equity, including, but
not limited to, the right of specific performance (regardless of whether
enforceability is considered in a proceeding in equity or at law).
In addition, we wish to advise you that the enforceability of
certain provisions set forth in the Underwriting Agreement, the Purchase
Agreement and the Indemnification Agreement which purport to provide for
indemnification for losses due to securities laws violations may be limited by
public policy considerations.
We are admitted to the Bar of the State of New York and California,
and we express no opinion as to the laws of any other jurisdiction except as to
matters that are governed by federal law and, with respect to paragraph 1 below,
the General Corporation Law of the State of Delaware. All opinions expressed
herein are based on laws, regulations and policy guidelines currently in force
and may be affected by future regulations. Furthermore, no opinion is expressed
herein regarding the applicable state Blue Sky, legal investment or real estate
syndication laws.
Based upon the foregoing and subject to the last paragraph hereof,
we are of the opinion that:
1. MSABS is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and is duly
qualified to do
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To the Addressees Listed
on Schedule I Hereto;
July 25, 2000;
Page 4
business in each state necessary to enable it to perform its obligations
under the Documents.
2. MSABS has the corporate power and authority to convey the
Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate transactions contemplated by the Documents. The Documents have
been duly authorized, executed and delivered by MSABS.
3. Each of the Documents constitutes the valid, legal and binding
agreement of MSABS, and is enforceable against MSABS in accordance with
its terms except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other similar laws relating to
or affecting the rights of creditors generally, and by general equity
principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
4. The Notes, assuming the due execution thereof by the Owner
Trustee, on behalf of the REMIC Trust or the NIMS Trust, as the case may
be, and due authentication thereof by the Indenture Trustee and payment
therefor pursuant to the Underwriting Agreement or the Purchase Agreement,
as the case may be, are validly issued and outstanding and are entitled to
the benefits of the REMIC Indenture or the NIMS Indenture, as the case may
be.
5. No consent, approval, authorization or order of, registration or
filing with, or notice to, any governmental authority or court is required
under federal laws or the laws of the State of New York for the execution,
delivery and performance of the Documents or the offer, issuance, sale or
delivery of the Notes or the consummation of any other transaction
contemplated thereby by MSABS, except such which have been obtained.
6. The Registration Statement and the Prospectus (other than the
financial and statistical data included therein, as to which we are not
called upon to express any opinion), at the time the Registration
Statement became effective, as of the date of execution of the
Underwriting Agreement and as of the date hereof comply as to form in all
material respects with the requirements of the Securities Act of 1933, as
amended, and the rules and regulations thereunder, and the Securities
Exchange Act of 1934, as amended and the rules and regulations thereunder,
and we do not know of any amendment to the Registration Statement required
to be filed, or of any contracts, indentures or other documents of a
character required to be filed as an exhibit to the Registration Statement
or required to be described in the Registration Statement or the
Prospectus, which has not been filed or described as required.
7. The Registration Statement is effective, and to the best of our
knowledge, the Securities and Exchange Commission has not issued any stop
order suspending the effectiveness of the Registration Statement (which
for
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To the Addressees Listed
on Schedule I Hereto;
July 25, 2000;
Page 5
purposes of this opinion shall not be deemed to include any exhibits filed
therewith) or any order directed to any prospectus relating to the Notes
(including the Prospectus), and has not initiated or threatened any
proceeding for that purpose.
8. The issuance of the Notes (other than the Class A Notes) under
the circumstances contemplated by the Documents, the Mezzanine PPM and the
NIMS PPM constitutes an exempt transaction under the Securities Act of
1933, as amended, and the registration thereunder is not presently
required.
9. The registration of the Depositor, the REMIC Trust or the NIMS
Trust under the Investment Company Act of 1940 is not required.
10. The REMIC Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended, and the NIMS Trust Agreement is not
required to be so qualified. The provision regarding the filing of
bankruptcy petitions against the related Trust, as set forth in Section
11.16 of each Indenture, does not violate Section 3.16(b) of the Trust
Indenture Act of 1939, as amended, and is enforceable in accordance with
its terms.
11. The statements in the Prospectus Supplement (x) set forth under
the captions "Description of the Notes", "Credit Enhancement" and "The
Transaction Documents", to the extent such statements purport to summarize
certain provisions of the Documents, are fair and accurate in all material
respects and (y) set forth under the captions "Material Federal Income Tax
Consequences" and "ERISA Considerations" to the extent that they
constitute matters of federal law or federal legal conclusions, provide a
fair and accurate summary of such law and conclusions.
12. The statements in the Mezzanine PPM (x) set forth under the
captions "Description of the Mezzanine Notes", "Credit Enhancement" and
"The Transaction Documents", to the extent such statements purport to
summarize certain provisions of the Documents, are fair and accurate in
all material respects and (y) set forth under the captions "Material
Federal Income Tax Consequences" and "ERISA Considerations" to the extent
that they constitute matters of federal law or federal legal conclusions,
provide a fair and accurate summary of such law and conclusions.
13. The statements in the NIMS PPM set forth under the captions
"Description of the Class N Notes", "Description of the Indenture",
"Description of the Underlying Notes", to the extent such statements
purport to summarize certain provisions of the Class N Notes, the other
Notes or of the Documents, are fair and accurate in all material respects
and (y) set forth under the captions "Material Federal Income Tax
Consequences" and "ERISA Considerations" to the
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To the Addressees Listed
on Schedule I Hereto;
July 25, 2000;
Page 6
extent that they constitute matters of federal law or federal legal
conclusions, provide a fair and accurate summary of such law and
conclusions.
14. None of the sale of the Mortgage Loans to the REMIC Trust, the
sale of the Class S Notes and the Class P Notes to the NIMS Trust, the
issuance or sale of the Notes, or the execution, delivery or performance
by MSABS of its obligations under the Documents, conflicts with or will
conflict with, or results or will result in a breach of, or constitutes or
will constitute a default under the charter or bylaws of MSABS or any law,
rule or regulation of the United States federal government or of the State
of New York.
15. The Sale and Servicing Agreement, upon execution and delivery,
is effective to create either a valid ownership or security interest in
favor of (x) the REMIC Trust in all of the Depositor's right, title and
interest in and to the Mortgage Loans transferred to the REMIC Trust from
time to time pursuant to the Sale and Servicing Agreement and (y) the NIMS
Trust in all of the Depositor's right, title and interest in an to the
Class S Notes and the Class P Notes transferred to the NIMS Trust.
16. The REMIC Indenture, upon execution and delivery, is effective
to create a valid and enforceable security interest in favor of the
Indenture Trustee, for the benefit of the REMIC Noteholders, in all of the
REMIC Trust's right, title and interest in the Mortgage Loans.
17. The NIMS Indenture, upon execution and delivery, is effective to
create a valid and enforceable security interest in favor of the Indenture
Trustee, for the benefit of the Class N Noteholders, in all of the Trust's
right, title and interest in the Class S Notes and the Class P Notes.
18. The security interest created by the REMIC Indenture in favor of
the Indenture Trustee, for the benefit of the REMIC Noteholders, will
constitute a first perfected security interest upon the delivery of the
Mortgage Files on behalf of the Indenture Trustee, and the recording of
instruments in accordance with the provisions of the Sale and Servicing
Agreement; provided, however, that we express no opinion (a) as to the
continuation of a security interest in the Mortgage Notes or the Mortgages
in the event the Originator or the Seller discharges or releases the
Mortgage Notes or the Mortgages prior to delivery of the Mortgage Notes
and the recording of instruments of assignment in respect of the Mortgages
in the appropriate recording offices, (b) as to title in any Mortgaged
Property or the existence of priority in any lien with respect to such
property or as the to the enforceability of any remedy that may be
dependent on that title or such lien, or (c) as to the priority of any
security interest against any liens, claims or other interest that by
operation of law take priority over previously perfected security interest
(including, in certain circumstances, certain federal and state tax liens,
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To the Addressees Listed
on Schedule I Hereto;
July 25, 2000;
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liens arising under the Employee Retirement Income Security Act of 1974,
as amended, and certain claims of the United States Government).
19. The security interest created by the NIMS Indenture in the Class
S Notes and the Class P Notes in favor of the Indenture Trustee, for the
benefit of the Class N Noteholders, will constitute a first perfected
security interest upon the delivery of the Class S Notes and the Class P
Notes to the Indenture Trustee and the registration of such Notes in the
name of the Indenture Trustee; provided, however, that we express no
opinion as to the priority of any security interest against any liens,
claims or other interest that by operation of law take priority over
previously perfected security interest (including, in certain
circumstances, certain federal and state tax liens, liens arising under
the Employee Retirement Income Security Act of 1974, as amended, and
certain claims of the United States Government).
We note that the opinions set forth in paragraphs 15, 16 and 17
regarding the creation and validity of security interests are governed by the
Uniform Commercial Code as in effect in the State of New York. We further note
that the opinions set forth in paragraphs 18 and 19 regarding the perfection and
priority of security interests is governed by the Uniform Commercial Code as in
effect in the State of California.
Our conclusion that the security interest described in paragraph 18
would be a "first perfected security interest" is based upon (x) the mortgage
assignment recording requirements of the Sale and Servicing Agreement, and (y)
representations of the Originator, the Seller and the Depositor in the Sale and
Servicing Agreement. We further note that, until such time as assignments of
mortgage are recorded in the name of the Indenture Trustee in the appropriate
jurisdictions (x) the Indenture Trustee may not, in certain jurisdictions, be
independently able to enforce the Mortgage against the related Mortgaged
Property or the related Mortgagor, (y) the Originator or the Seller could record
an assignment of a Mortgage in the name of a third party or record a discharge
and satisfaction of a Mortgage and (z) any notices which may be given to the
record holder of a Mortgage would be given to the Originator, the Seller or the
Master Servicer.
Our opinions contained herein are rendered only as of the date
hereof, and we undertake no obligation to update this letter or the opinions
contained herein after the date hereof.
This opinion is furnished by us as counsel in connection with the
transaction contemplated by the Documents and is solely for the benefit of the
addressees hereto, and is not to be used, circulated, quoted or otherwise
referred to for any other purpose without our express written permission.
Very truly yours,
/S/
----------------------------
Dewey Ballantine LLP
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SCHEDULE I
<TABLE>
<S> <C>
Morgan Stanley ABS Capital Trust 2000-1 Morgan Stanley ABS Capital Trust 2000-1N
c/o Wilmington Trust Company, c/o Wilmington Trust Company,
as Owner Trustee as Owner Trustee
Rodney Square North Rodney Square North
1100 N. Market Street 1100 N. Market Street
Wilmington, Delaware 19890-0001 Wilmington, Delaware 19890-0001
Morgan Stanley & Co. Incorporated Morgan Stanley ABS Capital I, Inc.
1585 Broadway 1585 Broadway
New York, New York 10036 New York, New York 10036
Morgan Stanley Dean Witter Mortgage Long Beach Mortgage Company
Capital, Inc. 1100 Town & Country Road, Suite 1600
1585 Broadway Orange, California 92868
New York, New York 10036
Wilmington Trust Company, Bankers Trust Company of California, N.A.,
as Owner Trustee as Indenture Trustee
Rodney Square North 1761 East St. Andrew Place
1100 N. Market Street Santa Ana, California 92705-4934
Wilmington, Delaware 19890-0001
Moody's Investors Service, Inc. Fitch, Inc.
99 Church Street 1 State Street Plaza
New York, New York 10007 New York, New York 10004
</TABLE>
