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A guide to key resources: asset finance
Practical Law UK Practice Note Overview 0-386-4274 (Approx. 13 pages)
A guide to key resources: asset finance
| Maintained • England, Wales |
Asset finance covers the financing of all sorts of assets, from the so-called "big ticket" assets such as ships and aircraft, to smaller items of plant and machinery such as ship containers, buses and wheelybins. Financing can be of a single asset or of a whole series of assets, and the financing may be done by way of secured lending or leasing.
As well as links to Practical Law Finance's asset finance practice notes, checklists, standard documents and drafting notes, this note links to resources relevant to asset finance from other Practical Law services such as Practical Law Tax, Practical Law Cross-border and Practical Law Environment.
Introduction
This note acts as a guide to Practical Law Finance's resources on the debt financing of assets intended to be used for commercial purposes. Examples of asset financing include aircraft finance, ship finance, rail finance and equipment finance.
Asset finance overview
For an introduction to asset finance, including an introduction to the types of structures used in asset financing and some of the key issues relevant to those structures, see Practice note, Asset finance: overview.
Asset finance
Secured lending
For an overview of financing an asset using secured lending, see Practice note, Asset finance: overview: Secured lending.
Security
- For information on the types of security that may be taken in an asset finance transaction, see Practice note, Asset finance: overview: Security.
- For an outline of the options available to a lender taking security, see Practice note, Taking security.
- For an introduction to the different methods of perfecting security, the basic rules governing priority and contractual ways in which the rules can be varied, see Practice note, Perfection and priority of security.
- For a note providing an overview of the issues that need to be considered when taking security over an overseas asset or from an overseas entity, see Practice note, Taking cross-border security.
- For a global guide to taking security, see Finance global guide.
- For an overview of Practical Law Finance's resources on security and quasi security arrangements, see Practice note, A guide to key resources: security and quasi-security.
Leasing
- For an introduction to financing an asset using leasing, see Practice note, Asset finance: overview: Leasing.
- For an overview of leasing as a financing technique, see Practice note, Leasing as a financing technique: overview.
Combined secured lending and leasing
For an overview of financing an asset using a combination of secured lending and leasing, see Practice note, Asset finance: overview: Combined secured lending and leasing.
Shipping finance
Overview
For an overview of some of the principal types of financing structures, key commercial considerations, legal documents and key issues involved in shipping finance transactions, see Practice note, Shipping finance: overview.
Ship registration
For a quick guide to registering a ship on the register of British ships, see Practice note, Registering a ship: a quick guide.
For an article looking at the different types of ship registry, in particular national registers, open registers, international registers and bareboat registers, see Article, Ship registers.
Ship finance facility agreement
- For a note looking at the parties to, and key provisions of, a facility agreement used to finance (or refinance) the acquisition of a second-hand ship, see Practice note, Ship finance facility agreement: parties and key provisions.
- For a standard clause setting out the typical conditions precedent used in a bilateral facility agreement for financing the acquisition of a second-hand ship, together with drafting notes, see Standard clause, Ship finance facility provisions: conditions precedent.
- For a standard clause setting out key definitions used in a bilateral facility agreement for financing the acquisition of a second-hand ship, together with drafting notes, see Standard clause, Ship finance facility provisions: definitions.
- For a standard clause setting out events of default for use with a bilateral facility agreement for financing the acquisition of a second-hand ship, see Standard clause, Ship finance facility provisions: events of default.
Financing the construction and delivery of a new ship
For a note looking at financing pre-delivery payments or the delivery payment for the acquisition of a new ship, considering the key terms of a shipbuilding contract and refund guarantee, the typical security required by lenders and looking at the key drafting considerations for pre-delivery and delivery facility agreements, see Practice note, Financing the construction and delivery of a new ship.
Security
- For a note looking at UK ship mortgages, considering why a ship mortgage is important in shipping finance transactions, the form UK ship mortgages take, priority issues and the limitations of a ship mortgage as a form of security, see Practice note, Ship mortgages.
- For a quick guide to registering a mortgage over a British ship, see Practice note, Registering a mortgage over a ship: a quick guide.
- For a note looking at the key provisions of a deed of covenant used to supplement a UK statutory ship mortgage, see Practice note, Shipping finance: Deed of covenant.
- For a note looking at the role a general assignment of earnings, insurances and requisition compensation plays in a shipping finance transaction, see Practice note, General assignment of earnings, insurances and requisition compensation.
Charters
- For a note looking at time (non-demise) charters in ship finance, including the key features of a tripartite agreement (or letter of quiet enjoyment) that is used to contractually regulate the competing interests of a time charterer and lender, see Practice note, Time (non-demise) charters in ship finance: tripartite agreements, letters of quiet enjoyment and step-in rights.
- For a note looking at bareboat (non-demise) charters in ship finance, including the key features of a tripartite agreement (or letter of quiet enjoyment) that is used to contractually regulate the competing interests of a bareboat charterer and lender, see Practice note, Bareboat (demise) charters in ship finance: tripartite agreements, letters of quiet enjoyment and step-in rights.
Debt capital markets financing for shipping and offshore assets
For an article looking at the use of debt capital markets financing for shipping and offshore maritime assets, see Article, Debt capital markets financing for shipping and offshore maritime assets.
LIBOR transition: implications for ship finance transactions
For an article looking at the implications of LIBOR transition in shipping finance transactions, see Article, LIBOR transition: implications for different finance transactions: Asset finance.
Enforcing security
For a note looking at practical considerations for a lender enforcing security in a cross-border ship financing, see Sector note, Enforcing security in cross-border ship finance: considerations for a lender.
Aircraft finance
Overview
For an overview of the main parties, key features of the various financing options, some of the principal types of financing structures, the typical finance documents and key considerations involved in aircraft finance transactions, see Practice note, Aircraft finance: overview.
Secured lending and leasing
- For a note looking at two methods of financing the acquisition of a commercial aircraft: secured lending and financing leasing, the structure and key terms of each method and the advantages and disadvantages of financing leasing compared to secured lending in aircraft finance, see Practice note, Aircraft finance: secured lending and finance leasing.
- For a note looking at what an aircraft operating lease is, its key terms and the advantages and disadvantages of operating leases for airlines, see Practice note, Aircraft finance: operating leases.
- For a checklist comparing the key features of an aircraft finance lease and an aircraft operating lease, see Checklist, Comparison of aircraft finance lease and aircraft operating lease.
- For a template acceptance certificate under an aircraft operating lease, see Standard document, Acceptance certificate for aircraft operating lease.
Pre-delivery payment financing
For an article looking at aircraft pre-delivery payment (PDP) financing, examining how this type of financing works, issues commonly negotiated between the aircraft/engine manufacturers and PDP financiers, risks associated with PDP financing and the development of new financing structures, see Article, Paper planes: the financing of aircraft pre-delivery payments.
LIBOR transition: implications for aircraft finance transactions
For an article looking at the implications of LIBOR transition in aircraft finance, see Article, LIBOR transition: implications for different finance transactions: Asset finance.
Aircraft finance in other jurisdictions
For an overview of practical issues relating to aviation finance in key jurisdictions worldwide, including available financing options for purchasing aircraft, registration and deregistration requirements, transfer of title, security, transfer of security, enforcement of security and repossession, and application of the Cape Town Convention, see Aviation finance global guide.
Global Aircraft Trading System
For an overview of the Global Aircraft Trading System which is an online trading platform facilitating the outright transfer and granting of security over beneficial interests in commercial and business aircraft and engines, see Practice note, Global Aircraft Trading System: overview.
Non-payment insurance supported aircraft financing
For a note looking at the use of non-payment insurance supported financing structures to finance the acquisition of new and nearly new commercial aircraft, see Sector note, Non-payment insurance supported aircraft financing.
Rail finance
For an overview of the structures, parties and documentation involved in financing the acquisition of new passenger rolling stock as well as some of the commercial and technical considerations involved in rail finance, see Practice note, Financing the acquisition of new rolling stock: structures, parties and documentation.
For an overview of train operating contracts, the applicable regulatory regime including the impact of the Williams-Schapps Plan for Rail and the key government and regulatory bodies involved in a typical rail finance transaction, see Practice note, Train operating contracts, the regulatory regime and key government and regulatory bodies in rail finance.
Film finance
For an overview of film production financing, looking at the types of finance structure, parties and documents involved in film production finance transactions, see Practice note, Film finance: overview.
Tax
Tax issues for finance lawyers
For a summary of the tax issues that frequently arise in respect of commercial lending transactions, see Practice note, Tax for banking lawyers.
Tax issues for equipment leasing transactions
For a summary of the tax regime applying to equipment leasing transactions, see Practice note, Equipment leasing: tax: introduction.
Withholding tax
For a summary of the UK withholding tax rules on payments of interest and certain other payments, see Practice note, Withholding tax.
VAT issues for banks
For a summary of the various VAT issues that arise for banks in the course of their business, see Practice note, VAT issues for banks.
Anti-avoidance case law and tax
For more information on anti-avoidance case law and tax, issues which are often relevant to structuring asset finance transactions, see:
Global guide on taxes
For a global guide to taxes on corporate transactions and finance transactions, see Tax on Transactions global guide.
Environmental issues in asset finance transactions
Environmental issues are often important in asset finance, for example, pollution is an issue in ship finance (the risk of which is usually mitigated using insurance).
- For a note on environmental issues that can arise in finance transactions, see Practice note, Environmental issues in finance transactions.
- For an article looking at the Poseidon Principles (that launched on 18 June 2019), examining what the principles are, what their aim is, how they will affect financiers and ship owners, and the impact they will have on transaction documentation, see Article, The Poseidon Principles: will they affect me?.
Insurance issues in asset finance transactions
For a note that explains the various doctrines and principles concerned with insurance, including what constitutes an insurable interest, subrogation, joint insurance, double insurance and noting, see Practice note, Insurance contract law: general principles.
For more information on the legal principles that apply when assigning an insurance policy or the right to receive the insurance monies due under the policy to a third party, see Sectors note, Assignment of insurance policies and claims.
Legal opinions in asset finance transactions
For an overview of the matters to be considered when requesting or responding to a request for an English legal opinion in a finance transaction, see Practice note, Legal opinions in finance transactions: overview.
Execution of asset finance documents
For a note on the execution of deeds and documents under the laws of England and Wales, see Practice note, Execution of deeds and documents.
For a note on the role of notaries that explains what notarisation, legalisation and apostille mean, see Practice note, Notaries and notarisation.
Insolvency
The potential implications of insolvency law should be recognised when advising on asset finance transactions. The following resources provide an overview of various insolvency procedures.
Insolvency procedures
For an introduction to the aims of and background to corporate insolvency law, together with a brief overview of the various insolvency procedures available, see Practice note, Corporate insolvency: a guide.
Restructurings
For a note that looks at the key stages involved in restructuring corporate debt, see Practice note, Corporate debt restructuring: step by step.
Cross-border restructuring and insolvency
- For a global guide to restructuring and insolvency, see Restructuring and Insolvency global guide.
- For background information on the international aspects of insolvency, see Practice note, Cross-border insolvencies.
Useful links
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