structured asset finance business focusing on tax-based deals, it
revealed last month that it has signed a £40 million (€50.7
million) financing of construction equipment with a Middle Eastern
client.
The bank’s new business plan is to focus on structured deals
that make use of tax advantages across jurisdictions and it
involves the head of the proposed new business, Steve Hackett,
currently head of RBS Asset Finance Europe, being relocated to the
United States from London.
This follows RBS’ recent decision to almost entirely close to
new business its RBS Structured Asset Finance Europe and to also
move away from signing deals where RBS takes residual-value
risk.
The recent deal, which closed at the end of October, involved
the leasing of standing cranes on a five-year finance lease. The
assets are to be used in Qatar and Saudi Arabia. As a short-funding
lease, it takes advantage of capital allowances of 20 percent
introduced in the UK’s Finance Act of 2006.
These tax advantages enabled RBS to offer the client, whose
identity was undisclosed, floating interest rates of just 50 basis
points above Euribor. There was no up-front payment, but there will
be a large balloon payment at the end. Treasury is sourced
exclusively from RBS in the UK.
The deal had an extra layer of complexity because under Qatar
and Saudi law the assets could only be imported by local registered
companies.
As RBS’s client was registered elsewhere, it had to use a local
affiliate as the importation agent. The lessee acted as the sales
agent.
Denton Wilde Sapte, longstanding advisers to RBS and its
structured asset finance businesses, advised RBS.
Following the discontinuation of Structured Asset Finance, staff
of this business have “where possible been redeployed within the
bank”, said Hackett.
He added that “as a result of the reorganisation” RBS’
structured ship finance group, headed by Andy Giorgiou, has been
strengthened and now has an increased focus on oil and gas, The
aviation capital group, headed by Peter Barrett, has absorbed the
former corporate jet financing activities of Structured Asset
Finance.
A further group has migrated across to the Financial Structuring
Group headed by Tim Pettit and will have specific responsibility
for structured lease and asset finance opportunities.
The group’s key managers, Steve Hackett, Philip Tubb and David
Webborn have “aspirations of further geographic growth where
required”.
Hackett added: “The team will have a global remit and will work
within the existing Financial Structuring Group global
footprint.”
Brendan Malkin
