Allen & Overy said the Lighthouse Trade Finance transaction brought together financing structures from different areas of structured finance to create a financing platform for a new asset class and open a new funding avenue for commodity trade finance. The A&O team advised the arranger, BNP Paribas (London) and was led by capital markets partner Tim Conduit, with assistance from senior associate Michele Yeo-Mokhtar and associates Daniel Marcus and Michael Zdrowski.
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, which 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 (i.e., 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 fertilizers in raw, semi-finished, finished or alloy product.
Tim Conduit, partner in Allen & Overy International Capital Markets practice, said: “While this is a new asset class for this type of structure, the financing techniques are well-established. It is further proof of how the market continues to look for new ways to access finance, whether through innovative new structures or simply bring new assets to existing structures in order to unlock new sources of finance outside the core bank finance market.”
Senior funding for this initial transaction was rated AAAsf by Fitch, Class B Notes were listed on the Irish Stock Exchange and subordinated notes were sold by way of a private placement.