Asset Finance Transactions & Law | White & Case
Asset Finance

Asset Finance

For capital intensive industries and assets, maximizing the return on investments, addressing funding requirements for expenditure programs and managing risk require complex judgments about business needs, tax and accounting rules, and a variety of legal, regulatory and operating issues – often across multiple jurisdictions with conflicting legal regimes. Challenges and opportunities are further complicated by changes in the flow and availability of capital, continuing uncertainties regarding global growth, technological advances and continuing disequilibrium in particular industries. Our extensive experience in a broad range of industrial sectors and the depth of our resources in all primary markets give our clients a unique advantage on these matters.

Supporting our clients as they optimize their strategies

We are a recognized leader and innovator in asset-based and structured financing transactions. We have been involved in every significant development in asset-based finance, including in the cross-border market, and have pioneered many of the tax, legal and financial structures used in countries around the world.

Our global platform and substantial industry knowledge combine to put us in a unique position to navigate the complexities, challenges and opportunities our clients are facing. The products, transaction structures and commercial solutions we have developed give our clients a competitive edge in the implementation of their business strategy, whether in the optimization of their investments, gaining access to new and competitive sources of financing or in addressing the risks they face in an ever more complex legal, regulatory and operating environment.

The asset finance business and our role

We have substantial experience and knowledge in a wide range of sectors, including:

  • Commercial aviation, private jet and helicopter financing
  • Shipping and maritime
  • Rail equipment and infrastructure
  • Energy and other facility financings
  • Mining and metals
  • Telecommunications and satellites

Our lawyers are recognized market leaders in the application of all products related to complex asset-based and structured financings, including: tax and operating leases (including all types of Japanese operating lease transactions); warehouse loan facilities and pre-delivery payment financings; export credit agency (ECA) and manufacturer-supported financings; and numerous bank finance and debt capital markets-based transactions (including enhanced equipment trust certificate "EETCs" and asset-based securitization financings). We advise and represent clients on capital market equity raises and in high-profile bankruptcies and restructurings. We also routinely advise
on acquisitions of and/or investments in leasing companies and asset portfolios, secured and unsecured bridge and revolving credit financings, and a wide range of regulatory and asset repossession matters.

We represent all the participants in asset-based and structured finance transactions – including asset owners, operating companies, manufacturers, financial institutions, private equity and hedge funds, equity investors, lenders, lessors, lessees, investment advisors, corporate trustees, credit providers, joint venturers, debt and equity syndicates and multiple ECAs. Our understanding of the unique needs of all these participants allows us to craft specific strategies designed to help our clients reach their business goals and to address the challenges and opportunities they encounter.

Alpha Trains, rolling stock financing, 2013
Representation of Alpha Trains in connection with the acquisition and financing of 202 rolling stock assets operating across Europe from The Royal Bank of Scotland PLC (RBS) in a combined asset and share sale transaction. The assets have been managed by Alpha Trains on behalf of RBS since a consortium of investors acquired Alpha Trains from RBS in 2008. The acquisition was financed by a commercial secured debt facility provided by a consortium of lenders. The passenger trains and locomotives are employed in services across Continental Europe under leasing contracts with various European train operators.

American Airlines credit facility, 2014
Representation of Citibank, as administrative agent, in a US$1.15 billion credit facility for American Airlines, secured by certain of its slots, foreign gate leaseholders and route authorities "SGRs" related to its services to London, Tokyo or Chinese destinations, consisting of a revolver of up to US$400 million and a term loan facility of up to US$750 million. In addition, we provided representation to Deutsche Bank, as administrative agent, in connection with the US$400 million increase of the revolver under American Airlines' existing credit facility secured by certain of its SGRs related to its services to South American destinations.

Avianca French Tax Lease, 2014
Representation of BNP Paribas S.A. acting through its wholly-owned SPV as lessor, in the structuring and negotiation of the U.S. Ex-Im Bank supported financing of two Boeing model 787-8 aircraft to the Colombian airline Avianca utilizing a French tax lease and representation of TD Bank, S.A. and BNP Paribas S.A. in their capacity as lenders in the guaranteed loan granted to the lessor. This was the first Ex-Im Guaranteed deal for Avianca.

BBAM Aircraft Management LLC, purchase and lease and back-leveraging of six aircraft with JOL, 2014
Representation of BBAM Aircraft Management LLC in the purchase and lease, and back-leveraging of six Boeing 777-300ER aircraft with fixed and floating rate, non-recourse loans in a transaction involving the use of a Japanese Operating Lease structure for wide-body aircraft. This matter involved White & Case lawyers from across our practice groups and jurisdictions, including Asset Finance, derivatives, and Tax working together from our offices in the US, the UK and Japan to help BBAM Aircraft Management achieve their objectives.

Energy-related financings, John Sevier and Southaven combined cycle electric generating facilities, 2012 and 2013
Representation of Morgan Stanley & Co. and other syndicate underwriters in connection with a US$1 billion financing through a lease-purchase transaction consisting of a US$900 million bond issuance and a US$100 million equity investment in the 880 MW John Sevier combined-cycle gas-fired power plant in Rogersville, Tennessee. This transaction represented the first "lease purchase contract" financing undertaken by Tennessee Valley Authority (TVA) and was followed by a similar transaction in which we represented Bank of America Merrill Lynch, as structuring agent, and, together with J.P. Morgan and Morgan Stanley, as joint bookrunning managers, in connection with a US$360 million offering of 3.846% secured notes due 2033.

European ECA-supported aviation financing with built-in capital markets refinancing, 2013
Representation of Export Credits Guarantee Department (ECGD) in the US$300 million ECA-supported bond refinancing of an ECA-supported financing of four Airbus A330 aircraft. This was also the first ECA deal that built in the ability to refinance the deal in the debt capital markets from day one, and other transactions are being based on these documents and principles. While the issuer of the capital markets bonds was a Cayman special purpose vehicle, the deal credit is ultimately Malaysian Airline System Berhad.

Japanese Operating Lease (JOL) container financing and liquid natural gas (LNG) tanker financings, 2014
Representation of Yamasa Sangyo as equity provider in a JOL container vessel financing with OOIL, under long-term charter arrangements. The transaction was financed by Commonwealth Bank of Australia and is an example of the increasing sophistication of financing structures in vessel financings drawing on established techniques in other asset classes. In addition, we provided representation to the sponsors in relation to six separate projects for the construction, chartering and financing of 135,000-ton LNG tankers to be employed under contracts of affreightment to Japanese utility companies as well as representing the Japan Bank for International Cooperation and the lenders providing project finance-style facilities in relation to the construction and financing of a further two LNG tankers for a Japanese utility.

JetBlue, privately placed aviation EETC transactions, 2014
Representation of JetBlue Airways Corporation in the sale of US$225 million privately placed Enhanced Equipment Trust Certificates (EETCs), arranged by Citigroup Global Markets Inc. as placement agent. The EETCs are effectively secured by first priority liens on 14 Airbus A320-232 aircraft owned by JetBlue, and the facility has the benefit of an 18-month liquidity facility provided by KfW IPEX-Bank GmbH. This matter is a strong example of our innovative work in the US aviation finance sector, and was one of the first privately placed EETC transactions.

Micron Semiconductor Asia Pte. Ltd., 2013
Representation of Micron Semiconductor Asia Pte. Ltd., as issuer, and Micron Technology, Inc., as parent guarantor, in the issuance of US$462 million 1.258% secured notes due 2019, guaranteed by US Ex-Im Bank. The notes were offered under a medium-term note program in Singapore, established with J.P. Morgan (S.E.A.) Limited as the lead arranger. The proceeds from the sale of the notes were used to finance the purchase of certain semiconductor production equipment used to produce NAND Flash memory products and certain other eligible goods and services.

Minsheng Financial Leasing, asset portfolio acquisition, 2014
Representation of Minsheng Financial Leasing Co., Ltd in connection with the purchase of an entire portfolio of 13 aircraft from SMBC Aviation Capital Limited and the purchase of additional aircraft from Guggenheim Aviation. Our work included the relevant asset sales and novations with respect to existing leases with a variety of different carriers as well as the novation of purchase agreements and anticipated operating arrangements with other airlines. It also involved financing from, among others, BNP Paribas in Singapore. This matter is another strong example of our innovative work in the international aviation finance sector, and was awarded "China Deal of the Year" in 2014.

Odebrecht's US$580 million and US$1.69 billion Project Bond Offerings, 2013, 2014
Representation of the underwriters in both the US$580 million and US$1.69 billion project bond offerings by Odebrecht Oil and Gas.  The US$1.69 billion offering is now a blueprint for deep-water drilling finance and was the largest project bond ever issued in Brazil. Generating high quality orders of some US$3.5 billion in a fragile market environment, it was also one of the most successful emerging market bond issues in recent years. This success was replicated in February 2014 with the launch of the follow-on transaction, on which White & Case also advised the underwriting banks. The additional series of notes also met with overwhelming investor demand in excess of US$5 billion. The US$1.67 billion offering was selected as “2013 Latin America Oil & Gas Deal of the Year” by Project Finance International magazine and as “2013 Latin American Upstream Oil & Gas Deal of the Year” by Project Finance magazine. According to Latin Lawyer, this transaction was the largest-ever project bond offering in Latin America.

Pegasus Airlines' US$360 million IPO and listing on Borsa Istanbul, 2013
Representation of Pegasus Airlines and its majority shareholder, Esas Holding A.S., in the IPO and listing on Borsa Istanbul of Pegasus Airlines. This offering was the largest IPO in Turkey since November 2010. This matter demonstrates how our team in the US works with clients around the world, bringing global best practice asset financing and capital markets techniques to their key transactions.

US Export-Import Bank's first bond secured by helicopters, 2013
Representation of Deutsche Bank Securities as bookrunner and initial purchaser in Milestone Aviation Group Limited's US$187.4 million US Ex-Im Bank's guaranteed notes issuance. Proceeds were used to refinance nine Sikorsky S-92 helicopters. Helicopters are less familiar to bond investors than commercial aircraft, making this transaction more complicated than a traditional aviation financing and requiring the application of financing techniques and sector knowledge to a new asset class. US Ex-Im Bank's extension of this type of funding to helicopter exports will help support this very competitive US aerospace industry.

Asset Finance
About

For capital intensive industries and assets, maximizing the return on investments, addressing funding requirements for expenditure programs and managing risk require complex judgments about business needs, tax and accounting rules, and a variety of legal, regulatory and operating issues – often across multiple jurisdictions with conflicting legal regimes. Challenges and opportunities are further complicated by changes in the flow and availability of capital, continuing uncertainties regarding global growth, technological advances and continuing disequilibrium in particular industries. Our extensive experience in a broad range of industrial sectors and the depth of our resources in all primary markets give our clients a unique advantage on these matters.

Supporting our clients as they optimize their strategies

We are a recognized leader and innovator in asset-based and structured financing transactions. We have been involved in every significant development in asset-based finance, including in the cross-border market, and have pioneered many of the tax, legal and financial structures used in countries around the world.

Our global platform and substantial industry knowledge combine to put us in a unique position to navigate the complexities, challenges and opportunities our clients are facing. The products, transaction structures and commercial solutions we have developed give our clients a competitive edge in the implementation of their business strategy, whether in the optimization of their investments, gaining access to new and competitive sources of financing or in addressing the risks they face in an ever more complex legal, regulatory and operating environment.

The asset finance business and our role

We have substantial experience and knowledge in a wide range of sectors, including:

  • Commercial aviation, private jet and helicopter financing
  • Shipping and maritime
  • Rail equipment and infrastructure
  • Energy and other facility financings
  • Mining and metals
  • Telecommunications and satellites

Our lawyers are recognized market leaders in the application of all products related to complex asset-based and structured financings, including: tax and operating leases (including all types of Japanese operating lease transactions); warehouse loan facilities and pre-delivery payment financings; export credit agency (ECA) and manufacturer-supported financings; and numerous bank finance and debt capital markets-based transactions (including enhanced equipment trust certificate "EETCs" and asset-based securitization financings). We advise and represent clients on capital market equity raises and in high-profile bankruptcies and restructurings. We also routinely advise
on acquisitions of and/or investments in leasing companies and asset portfolios, secured and unsecured bridge and revolving credit financings, and a wide range of regulatory and asset repossession matters.

We represent all the participants in asset-based and structured finance transactions – including asset owners, operating companies, manufacturers, financial institutions, private equity and hedge funds, equity investors, lenders, lessors, lessees, investment advisors, corporate trustees, credit providers, joint venturers, debt and equity syndicates and multiple ECAs. Our understanding of the unique needs of all these participants allows us to craft specific strategies designed to help our clients reach their business goals and to address the challenges and opportunities they encounter.

Experience

Alpha Trains, rolling stock financing, 2013
Representation of Alpha Trains in connection with the acquisition and financing of 202 rolling stock assets operating across Europe from The Royal Bank of Scotland PLC (RBS) in a combined asset and share sale transaction. The assets have been managed by Alpha Trains on behalf of RBS since a consortium of investors acquired Alpha Trains from RBS in 2008. The acquisition was financed by a commercial secured debt facility provided by a consortium of lenders. The passenger trains and locomotives are employed in services across Continental Europe under leasing contracts with various European train operators.

American Airlines credit facility, 2014
Representation of Citibank, as administrative agent, in a US$1.15 billion credit facility for American Airlines, secured by certain of its slots, foreign gate leaseholders and route authorities "SGRs" related to its services to London, Tokyo or Chinese destinations, consisting of a revolver of up to US$400 million and a term loan facility of up to US$750 million. In addition, we provided representation to Deutsche Bank, as administrative agent, in connection with the US$400 million increase of the revolver under American Airlines' existing credit facility secured by certain of its SGRs related to its services to South American destinations.

Avianca French Tax Lease, 2014
Representation of BNP Paribas S.A. acting through its wholly-owned SPV as lessor, in the structuring and negotiation of the U.S. Ex-Im Bank supported financing of two Boeing model 787-8 aircraft to the Colombian airline Avianca utilizing a French tax lease and representation of TD Bank, S.A. and BNP Paribas S.A. in their capacity as lenders in the guaranteed loan granted to the lessor. This was the first Ex-Im Guaranteed deal for Avianca.

BBAM Aircraft Management LLC, purchase and lease and back-leveraging of six aircraft with JOL, 2014
Representation of BBAM Aircraft Management LLC in the purchase and lease, and back-leveraging of six Boeing 777-300ER aircraft with fixed and floating rate, non-recourse loans in a transaction involving the use of a Japanese Operating Lease structure for wide-body aircraft. This matter involved White & Case lawyers from across our practice groups and jurisdictions, including Asset Finance, derivatives, and Tax working together from our offices in the US, the UK and Japan to help BBAM Aircraft Management achieve their objectives.

Energy-related financings, John Sevier and Southaven combined cycle electric generating facilities, 2012 and 2013
Representation of Morgan Stanley & Co. and other syndicate underwriters in connection with a US$1 billion financing through a lease-purchase transaction consisting of a US$900 million bond issuance and a US$100 million equity investment in the 880 MW John Sevier combined-cycle gas-fired power plant in Rogersville, Tennessee. This transaction represented the first "lease purchase contract" financing undertaken by Tennessee Valley Authority (TVA) and was followed by a similar transaction in which we represented Bank of America Merrill Lynch, as structuring agent, and, together with J.P. Morgan and Morgan Stanley, as joint bookrunning managers, in connection with a US$360 million offering of 3.846% secured notes due 2033.

European ECA-supported aviation financing with built-in capital markets refinancing, 2013
Representation of Export Credits Guarantee Department (ECGD) in the US$300 million ECA-supported bond refinancing of an ECA-supported financing of four Airbus A330 aircraft. This was also the first ECA deal that built in the ability to refinance the deal in the debt capital markets from day one, and other transactions are being based on these documents and principles. While the issuer of the capital markets bonds was a Cayman special purpose vehicle, the deal credit is ultimately Malaysian Airline System Berhad.

Japanese Operating Lease (JOL) container financing and liquid natural gas (LNG) tanker financings, 2014
Representation of Yamasa Sangyo as equity provider in a JOL container vessel financing with OOIL, under long-term charter arrangements. The transaction was financed by Commonwealth Bank of Australia and is an example of the increasing sophistication of financing structures in vessel financings drawing on established techniques in other asset classes. In addition, we provided representation to the sponsors in relation to six separate projects for the construction, chartering and financing of 135,000-ton LNG tankers to be employed under contracts of affreightment to Japanese utility companies as well as representing the Japan Bank for International Cooperation and the lenders providing project finance-style facilities in relation to the construction and financing of a further two LNG tankers for a Japanese utility.

JetBlue, privately placed aviation EETC transactions, 2014
Representation of JetBlue Airways Corporation in the sale of US$225 million privately placed Enhanced Equipment Trust Certificates (EETCs), arranged by Citigroup Global Markets Inc. as placement agent. The EETCs are effectively secured by first priority liens on 14 Airbus A320-232 aircraft owned by JetBlue, and the facility has the benefit of an 18-month liquidity facility provided by KfW IPEX-Bank GmbH. This matter is a strong example of our innovative work in the US aviation finance sector, and was one of the first privately placed EETC transactions.

Micron Semiconductor Asia Pte. Ltd., 2013
Representation of Micron Semiconductor Asia Pte. Ltd., as issuer, and Micron Technology, Inc., as parent guarantor, in the issuance of US$462 million 1.258% secured notes due 2019, guaranteed by US Ex-Im Bank. The notes were offered under a medium-term note program in Singapore, established with J.P. Morgan (S.E.A.) Limited as the lead arranger. The proceeds from the sale of the notes were used to finance the purchase of certain semiconductor production equipment used to produce NAND Flash memory products and certain other eligible goods and services.

Minsheng Financial Leasing, asset portfolio acquisition, 2014
Representation of Minsheng Financial Leasing Co., Ltd in connection with the purchase of an entire portfolio of 13 aircraft from SMBC Aviation Capital Limited and the purchase of additional aircraft from Guggenheim Aviation. Our work included the relevant asset sales and novations with respect to existing leases with a variety of different carriers as well as the novation of purchase agreements and anticipated operating arrangements with other airlines. It also involved financing from, among others, BNP Paribas in Singapore. This matter is another strong example of our innovative work in the international aviation finance sector, and was awarded "China Deal of the Year" in 2014.

Odebrecht's US$580 million and US$1.69 billion Project Bond Offerings, 2013, 2014
Representation of the underwriters in both the US$580 million and US$1.69 billion project bond offerings by Odebrecht Oil and Gas.  The US$1.69 billion offering is now a blueprint for deep-water drilling finance and was the largest project bond ever issued in Brazil. Generating high quality orders of some US$3.5 billion in a fragile market environment, it was also one of the most successful emerging market bond issues in recent years. This success was replicated in February 2014 with the launch of the follow-on transaction, on which White & Case also advised the underwriting banks. The additional series of notes also met with overwhelming investor demand in excess of US$5 billion. The US$1.67 billion offering was selected as “2013 Latin America Oil & Gas Deal of the Year” by Project Finance International magazine and as “2013 Latin American Upstream Oil & Gas Deal of the Year” by Project Finance magazine. According to Latin Lawyer, this transaction was the largest-ever project bond offering in Latin America.

Pegasus Airlines' US$360 million IPO and listing on Borsa Istanbul, 2013
Representation of Pegasus Airlines and its majority shareholder, Esas Holding A.S., in the IPO and listing on Borsa Istanbul of Pegasus Airlines. This offering was the largest IPO in Turkey since November 2010. This matter demonstrates how our team in the US works with clients around the world, bringing global best practice asset financing and capital markets techniques to their key transactions.

US Export-Import Bank's first bond secured by helicopters, 2013
Representation of Deutsche Bank Securities as bookrunner and initial purchaser in Milestone Aviation Group Limited's US$187.4 million US Ex-Im Bank's guaranteed notes issuance. Proceeds were used to refinance nine Sikorsky S-92 helicopters. Helicopters are less familiar to bond investors than commercial aircraft, making this transaction more complicated than a traditional aviation financing and requiring the application of financing techniques and sector knowledge to a new asset class. US Ex-Im Bank's extension of this type of funding to helicopter exports will help support this very competitive US aerospace industry.