NACFB Magazine Article: Fuelling two luxury refinance deals
Written by: Isaac Hooper (Account Manager)
Structuring a ‘classic’ deal
Back in 2005, Liberty Leasing recognised an opportunity to enter the classic, prestige and race car markets and since that time has built a solid reputation for dealing with these assets. Due to the type and potential age of these assets the transactions tend to be refinancing deals that involve careful structuring.
In March of this year, we were approached by one of our Brokers who had an ultra High Net worth individual with a proposal for 4 classic cars. The cars included an Aston Martin DB5 and a Ferrari 288 GTO with a cumulative value of £4m. At an agreed lend value of £2.5m this is Liberty’s largest deal ever.
The nature of a refinance tends to involve a higher level of work and expertise. For example, the assets were visited and valued by a specialist third party under the instruction of our asset team. With the director of the company being a foreign national with a limited profile in the UK this involved extra due diligence.
The main reason for the client to refinance the vehicles was to release funds from the asset to allow for a cash injection to the business whilst maintaining manageable payments. With this in mind the deal was structured to include balloons along with longer terms.
The director of the business was met by our Account Manager, Isaac Hooper in Mayfair. Isaac was responsible for the deal throughout the whole process and remains the point of contact for the introducer. Sales & Operations Director, Paul Sheedy also attended and commented:
“Whilst it feels like a natural progression, it’s great to see Liberty dealing with large ticket deals, particularly this year providing finance for two of the largest deals ever. As we’ve grown, we’ve continued to push the boundaries of what we can offer and are in a position where we are confident to handle larger transactions. We’ve made considerable investments in our infrastructure and systems with an in-house Asset and Legal Department as well as employing Richard Bristow as Head of Credit last year.
Isaac has done a fantastic job, having been with the company 2 years, coming through our training programme and mentored by Area Manager Lewis Banford. Liberty is passionate about nurturing new talent and believe it is vital for the future of the asset finance industry.”
This deal set somewhat of a trend at Liberty with the second largest deal being paid out in August also handled by Isaac. Our South East Account Management team were introduced to a refinance proposal for 2 Classic Jaguar Le Mans cars worth £2.5m with a lend of £1.56m.
This deal presented some challenges, which required negotiations between Liberty and the invoice discounting company in order to complete the transaction. The client benefitted in a number of ways from the refinancing as we were able to settle outstanding finance whilst applying residual ‘balloon’ payments to facilitate lower repayments as well as creating equity for the client.
Diversity is key
Whilst recognising their strength within the car markets, Liberty understand the importance of not ‘placing all their eggs in one
basket’. They continue to work hard to diversify the asset types they deal with. Angelo Stephens was a welcomed addition to the Asset team in 2016 who has specialist experience with Plant and Agricultural machinery.
Personal service has and always will remain key at Liberty as it allows them to spend more time with the client, understand the transaction ensuring a deal can be crafted and structured in a way that is viable and ultimately benefits the client.