Scope of facility agent’s duties considered

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The court considered the nature and scope of the duties of a facility agent in a syndicated, multi-tiered real-estate financing structure. The decision highlights the reluctance of the courts to impose liability or imply duties for such an agent in the event that these are not explicitly stated in the relevant finance documents.

RBS put together a £630m structured finance facility to Dunedin Property Industrial Fund (Holdings) for their industrious portfolio investing predominantly in industrial real estate. This was a multi-tiered financing structure split into six levels: (1) super senior loans; (2) senior loans; (3) mezzanine A loans; (4) mezzanine B1 loans; (5) mezzanine B2 loans; and (6) equity participation. RBS was both a lender and security trustee and agent at a variety of levels including the one material to the claimant’s case.

Torre Asset Funding (the claimant) invested approximately £27.8m at the junior mezzanine (B1) level. Significantly, the property ventures team of RBS acted as lender in the subordinated B2 mezzanine level and agent under the both B1 junior mezzanine facility agreement for the claimant and the relevant intercreditor deed…

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