Insights

GANADO Advocates advised on Marine Money’s Structured Finance and Innovation Deal of the Year.

GANADO Advocates advised on the Maltese law aspects of a ground-breaking maritime capital markets transaction for United Arab Shipping Company (“UASC”), as originator, in an issuance of USD 162 million 12-year Enhanced Maritime Trust Certificates (“EMTCs”) used to finance two 2012-built 13,500 TEU container vessels. The EMTCs were rated investment grade by Fitch and Kroll and the issuance received strong interest from institutional investors in Europe and the United States.

Deutsche Bank and Citigroup, as joint bookrunners for the UASC transaction, won Marine Money International’s Structured Finance and Innovation Deal of the Year award (announced in its February/March 2016 issue). The transaction was also awarded the Shipping Debt Deal of 2015 award by Global Transport Finance.

Each vessel was flagged in Malta, an EU member state, and transferred to its own newly established bankruptcy remote Maltese securitisation vehicle. Investors’ and rating agencies’ requirements were met uniquely by the combination of creditor friendly insolvency (and other) provisions of the Maltese Securitisation Act and Merchant Shipping Act.

The EMTC product builds on the established Enhanced Equipment Trust Certificates (or EETC) market in the aviation sector, and is arguably an industry first in shipping. The investment grade rating obtained is expected to facilitate repeat issuances and provide UASC with access to an alternative source of funding in the form of institutional investors in the debt capital markets.

Samir Sharma, Vice President – Project Finance of UASC said, “This transaction is a landmark transaction for UASC marking its debut in the debt capital markets. We are confident that the Company will continue to tap into this market in future for its financing needs.”

According to Max Ganado, Senior Partner and part of GANADO Advocates’ Capital Markets practice, “we and everyone involved in the UASC transaction believe that EMTCs represent a great leap forward for ship finance when traditional sources are facing a multiplicity of challenges. We were tested rigorously by this innovative deal, but Malta demonstrated admirably why it is the optimal jurisdiction for EMTC issuers.”

For further information on the use of Maltese securitisation vehicles in structured finance transactions, please contact a member of our Capital Market team.