Securitizability.com

Glencore International AG, one of the world’s leading natural resources companies, has completed the securitisation of certain of its base metal inventory holdings located in Belgium, Germany, Italy, the Netherlands, Singapore, Spain, Sweden and the United Kingdom, through a US$750 million asset backed commercial paper programme established by Arth Capital Corp (the ‘Programme’). International law firm Freshfields Bruckhaus Deringer acted as legal adviser to Glencore on the transaction, which closed on 29 April 2003. First funding is expected to occur in June 2003. The Programme follows on from Glencore’s expanded US$1.2 billion Albis programme for the securitisation of commodity receivables established in June 2000, on which Freshfields Bruckhaus Deringer also advised.

A team at Deutsche Bank AG led by Toni McDermott was arranger of the Programme, and Deutsche Bank AG and Barclays Capital were joint mandated lead arrangers of the US$450 million syndicated liquidity facility which supports it.

The Freshfields Bruckhaus Deringer team worked closely with Glencore and Deutsche Bank as transaction counsel in relation to the structuring, documentation and execution of this complex deal involving 11 jurisdictions.

Ian Falconer, the lead partner on the transaction for Freshfields Bruckhaus Deringer, said “We are delighted to have been able to work with Glencore and Deutsche Bank in bringing this transaction to a successful completion. It was certainly challenging from a technical perspective, and required a detailed analysis of complex legal and tax issues relating to the sale of inventory in a number of jurisdictions.

It involved several other innovative features, including rolling metal price hedging arrangements, and also the fact that liquidity support was provided by a combination of external funding provided by a syndicate of liquidity banks, with the balance of the transaction’s liquidity requirement being provided through the inherent liquidity and deliverability of the LME warrants.”

The Freshfields Bruckhaus Deringer team was led from Paris by structured finance partner Ian Falconer and senior associate Sarah Mook, assisted by Donna Healy in London. The team worked closely with colleagues in the firm’s Amsterdam, Brussels, Frankfurt, London, Milan, Madrid, New York and Washington offices, and with law firms Vinge in Sweden and Drew and Napier in Singapore.

Walder Wyss advised in relation to Swiss law, Mourant du Feu & Jeune in relation to Jersey law and Potter Anderson in relation to Delaware law.

Deutsche Bank and Barclays were advised by Cadwalader Wickersham & Taft (the team there being led by partner Jerry De Melo).

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Glencore completes $750m European securitisation