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Financing of floating
production storage and offloading (FPSO) assets
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Several law firms, including Norton
Rose and Berwin Leighton Paisner (BLP), reported that this market
is growing strongly at present, particularly in the Far East where
Japanese banks are willing to invest in these much-needed assets.
BLP recently dispatched finance partner Tom Budgett and two
associates to Singapore to focus on new opportunities, including in
the FPSO sector.
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The changing shape of the rail
finance sector
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With so many rail projects on the
go at present (Crossrail, IEP and Thameslink), it is no wonder that
this is a thriving sector. No surprises, therefore, that hosts of
lawyers are battling to act for the roscos. However, there is lots
of work to go round – Lloyds, Sumitomo Mitsui Banking Corporation
(SMBC) and NAB have all entered this market in a big way fairly
recently (although indirectly some of these had been active in rail
finance as debt providers to the Roscos). French banks are also
major players, particularly in continental Europe, and the likes of
Norton Rose have picked up a lot of this work. Meanwhile, as Roscos
carry out their own panel reviews this year (Angel is doing so
right now), this time next year we might see a new set of lawyers
working in this sector.
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Trading lease receivables
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There is plenty of this going on,
particularly in respect of leases into the local authority sector.
Clydesdale and Fortis Lease are regarded by lawyers as being
particularly heavily involved in this market. There is also a lot
of this business around in the consumer sector. A major deal of
recent months has been a sale and purchase back of $300 million
(€203 million) of receivables owned by Ford Credit across 76
jurisdictions.
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Upturn in invoice
discounting
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This market is going through the
roof right now. Of course, the recession drives this market as
customers look to this more innovative form of financing to
refinance themselves and raise capital. Some of these deals are for
large, high street companies, and therefore it comes as little
surprise that some of these deals are vast in scale. One lawyer
reported that he is currently handling a “nine-figure” ID deal.
Meanwhile, several leasing companies are restructuring their
departments in order to integrate their ID capability. However,
many senior lessors still believe that, in practice, ID and
leasing/HP will always be kept separate.
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Financing opportunities in the
offshore shipping sector
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There is plenty of demand for
offshore vessels such as drill ships with the Japanese banks SMBC
and Mizhuo and also ING being the dominant funders in this
sector.
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Asset finance fraud
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It is not coincidental, it would
appear, that the firms which have best integrated their asset
finance contentious and non-contentious divisions are those seeing
the greatest upturns in new business. This is partly because they
are more likely to be receiving asset fraud work which, quite
frankly, is booming right now. Aside from Global EPP, Thorneycroft,
Euro UK Hire and the other well-known multiple financing scandals
of the past 12 months, there have also been frauds where lessors
themselves have been the defendants, not to mention the large
numbers of individual cases of cars and other assets being sold
while on lease contract. Law firms doing a lot of this work are
Salans, Addleshaws, Shoosmiths and HBJ Gateley Wareing.
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Administrations and
insolvencies
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Much of this work is handled by
lawyers who form part of centralised insolvency departments, and
therefore might be involved with a range of administration work,
not just asset finance-related. However, within these departments
there are specialists in asset finance, and these are generally
rushed off their feet handling a range of business, from the
administration of Key Finance Corporation (a Landsbanki-owned
specialist in professionals financing), to the administration of
trailer rental company Blue Cube Rentals, Access Rentals and
Newtown Rentals. The fall-out for leasing companies of all this is
considerable. Meanwhile Sky Europe’s recent administration has
brought in a flood of work too for finance lawyers.
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Growth in power-related and
utilities financing
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Slowly but surely, as the world
turns to cleaner forms of energy, the leasing companies are
catching up. This is reflected in the increased volumes of
power-related work being handled by asset finance lawyers. One
firm, in fact, Addleshaw Goddard, said that power and utilities
asset finance work has become a major earner for its asset finance
department. Over at Watson Farley Williams, much of the increase in
new billings in its structured finance arm is linked to the wind
farm sector, although to date most of these have used project
finance rather than leasing structures. Large solar panels, another
growth area, tend to be financed on complex lease arrangements.
Firms are also seeing more waste management-related work.
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Growth in software
financing
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Lawyers reported that software
financing is a growth area. Most are tight-lipped over deals they
have done, although Alliance & Leicester in recent months
provided the financing for intellectual property rights for
computer games software.
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Dubai as a source of work
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Many law firms reported that Dubai
has become an ever-increasing source of business for them. Gone are
the days, perhaps, of seeing lots of cross-border, small asset
financing from the Middle East into the UK (something that RBS’s
former structured finance arm used to do a fair bit of). Work there
today relates to Islamic financing, including of corporate jets, a
market which is picking up, energy assets, and even asset
repossession work. Citibank is quite active in Dubai right now.
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Asset repossessions
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A very active sector, particularly
in the corporate jet and yacht markets where, although rich and
famous customers may be cash rich, their companies are not
necessarily so. This area is currently a bean feast for lawyers and
barristers alike.
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Source: Leasing Life
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