The Lighthouse Trade Finance transaction brought together tried-and-tested financing structures from different areas of structured finance to create a financing platform for a new asset class and opening a new funding avenue for commodity trade finance, according to Allen & Overy. The law firm advised the arranger, BNP Paribas, London branch, on the deal.
The transaction establishes a commodity finance receivables platform providing asset-backed financing for BNP Paribas Suisse’s Energy & Commodity finance business, with the ability to extend the funding platform to other entities within BNP Paribas’s worldwide Energy & Commodity Finance business.
The assets that may be purchased by the platform to support the financing are short-term, commodity-backed loan receivables made to eligible borrowers to finance physical commodity trading activities (in other words, transactions involving the sale of physical commodities).
The eligible commodities (backing the receivables) for the initial transaction include crude oil, oil products, ferrous or non-ferrous metals, coal and fertilisers in raw, semi-finished or alloy product.
The senior funding for this initial transaction was rated AAAsf by Fitch, the Class B notes were listed on the Irish Stock Exchange and the subordinated notes were sold by way of a private placement.
The Allen & Overy team was led by capital markets partner Tim Conduit, with assistance from senior associate Michele Yeo-Mokhtar and associates Daniel Marcus and Michael Zdrowski.
UK tax advice was provided by partner Christopher Harrison and senior associate Andrew Howard. US securities advice was provided by counsel Jeff Hendrickson and Paul Kleist.
The law firm also advised the trustees on the structure with a team including partner Simon Hill, counsel Malcolm Charles and associate Niketa Sharma.