Jones Day - Services - Structured Finance

Jones Day’s Structured Finance Practice focuses on the design of debt, equity, and hybrid financing techniques, including cross-border, in order to resolve financing goals that cannot be solved by conventional corporate finance or bank credit products. Tax considerations in such financial structures are often a critical component to achieving the financing goals. Jones Day tax lawyers are adept at deriving creative and sound strategies that balance the optimal tax treatment desired by the parties and responsible legal constraints.

Key tax issues involve the tax ownership of assets to ensure that tax benefits of ownership are optimized among the parties to the financing, structuring cash flows and financial relationships to achieve optimal debt and equity characterization, and managing the interplay of the tax and commercial laws of multiple jurisdictions. This latter issue—coordinating the interaction of cross-border flows of capital and assets with the tax laws of numerous jurisdictions—is one of Jones Day’s distinctive strengths. With senior, experienced tax lawyers practicing in all of the financial capitals of the world, Jones Day is able to bring our strength in cross-border tax planning to the demanding world of structured finance.

Jones Day’s team approach to undertaking structured finance transactions means that the relevant tax considerations of the parties are addressed at the outset of planning for the transaction and can be achieved with efficiency. Jones Day’s tax lawyers are experienced in the commercial, accounting, bankruptcy, and other commercial considerations that arise in structured finance transactions. As a result, our tax lawyers are able to identify opportunities and problems early in the design and implementation process, which is often critical to the success of a transaction. Our tax lawyers’ advice is practical and pragmatic, resulting in tax strategies and structures that are successful in achieving the demands of our clients. While analyzing, advising, and opining on the tax treatment underlying structured transactions are standard in the practice, the role of our tax lawyers in structured finance goes much further. Our tax lawyers, having broad experience in the field, take active roles in structuring, negotiating, and documenting the transactions. This coordination with the finance, bankruptcy, and other lawyers involved in the team staffing a given transaction ensures that the optimal tax treatment is not a "bolted on" afterthought but is, from the outset, an integral consideration in the structure and economics of the transaction. This tightly integrated approach results in quicker executions and greater confidence in the defensibility of the tax planning inherent in the transaction.

The range of transactions undertaken by Jones Day tax lawyers is broad, including:

Leveraged leasing and other structured leasing transactions.
Securitization transactions for all classes of assets including synthetic CLOs and other virtual securitization programs.
Project financings for energy and infrastructure development.
Tax credit monetization transactions including alternative energy tax credits, production tax credits, foreign tax credits, and state and local tax credits.
Cross-border financings and investments utilizing differing tax regimes.
Development of financial instruments and derivatives to achieve specific goals.

Recent Illustrative Transactions

Financing a Toll Road Project in Chile. Representation of Spanish project sponsors in issuance of CLO of US$232.5 million Class A Floating Rate Senior Notes, US$12.7 million Class B Floating Rate Senior Notes, US$10.95 million Class C Floating Rate Deferrable Senior Subordinated Notes, US$11.85 million Class D Floating Rate Senior Subordinated Notes, and US$8 million Class E Floating Rate Notes.

Guarantee of Korean Residential Mortgage-Backed Securitization. Representation of guarantor on the issuance of US$328 million Class A1 Guaranteed Secured Floating Rate Notes due 2014 and US$171.4 million Class A2 Guaranteed Secured Floating Rate Notes due 2024, on a pool of residential mortgage loans in Korea. This transaction constituted the second-ever cross-border mortgage-backed securities offering out of Korea. The transaction involved a 20-year cross-currency interest rate swap and unconditional 20-year swap.

Financing of China's Landmark LNG Project. Representation of the Chinese project sponsor in a complex multitier financing of China's first liquefied natural gas (LNG) terminal and trunkline project, which is due on-stream in 2006.

German Bank Structured Credit Agreement for Bermuda Insurance Company. U.S. secured credit facility provided by a German bank to a special-purpose Delaware LLC functioning as a "separate account" under a life insurance policy issued by a Bermuda-based insurance company to a Mexican national.

Leveraged Lease Financing of Rolling Stock. U.S.-based multitranche leveraged lease financing of rolling stock fleet.

Cross-Border Repo Financings. Large fundings of U.S. companies by foreign banks treated as secured financings for U.S. tax purposes.

	Print Page Email Page Select a Language Structured Finance - Overview
Lawyers Staff Overview Professionals Publications Main Practice Tax	Jones Day’s Structured Finance Practice focuses on the design of debt, equity, and hybrid financing techniques, including cross-border, in order to resolve financing goals that cannot be solved by conventional corporate finance or bank credit products. Tax considerations in such financial structures are often a critical component to achieving the financing goals. Jones Day tax lawyers are adept at deriving creative and sound strategies that balance the optimal tax treatment desired by the parties and responsible legal constraints. Key tax issues involve the tax ownership of assets to ensure that tax benefits of ownership are optimized among the parties to the financing, structuring cash flows and financial relationships to achieve optimal debt and equity characterization, and managing the interplay of the tax and commercial laws of multiple jurisdictions. This latter issue—coordinating the interaction of cross-border flows of capital and assets with the tax laws of numerous jurisdictions—is one of Jones Day’s distinctive strengths. With senior, experienced tax lawyers practicing in all of the financial capitals of the world, Jones Day is able to bring our strength in cross-border tax planning to the demanding world of structured finance. Jones Day’s team approach to undertaking structured finance transactions means that the relevant tax considerations of the parties are addressed at the outset of planning for the transaction and can be achieved with efficiency. Jones Day’s tax lawyers are experienced in the commercial, accounting, bankruptcy, and other commercial considerations that arise in structured finance transactions. As a result, our tax lawyers are able to identify opportunities and problems early in the design and implementation process, which is often critical to the success of a transaction. Our tax lawyers’ advice is practical and pragmatic, resulting in tax strategies and structures that are successful in achieving the demands of our clients. While analyzing, advising, and opining on the tax treatment underlying structured transactions are standard in the practice, the role of our tax lawyers in structured finance goes much further. Our tax lawyers, having broad experience in the field, take active roles in structuring, negotiating, and documenting the transactions. This coordination with the finance, bankruptcy, and other lawyers involved in the team staffing a given transaction ensures that the optimal tax treatment is not a "bolted on" afterthought but is, from the outset, an integral consideration in the structure and economics of the transaction. This tightly integrated approach results in quicker executions and greater confidence in the defensibility of the tax planning inherent in the transaction. The range of transactions undertaken by Jones Day tax lawyers is broad, including: Leveraged leasing and other structured leasing transactions. Securitization transactions for all classes of assets including synthetic CLOs and other virtual securitization programs. Project financings for energy and infrastructure development. Tax credit monetization transactions including alternative energy tax credits, production tax credits, foreign tax credits, and state and local tax credits. Cross-border financings and investments utilizing differing tax regimes. Development of financial instruments and derivatives to achieve specific goals. Recent Illustrative Transactions Financing a Toll Road Project in Chile. Representation of Spanish project sponsors in issuance of CLO of US$232.5 million Class A Floating Rate Senior Notes, US$12.7 million Class B Floating Rate Senior Notes, US$10.95 million Class C Floating Rate Deferrable Senior Subordinated Notes, US$11.85 million Class D Floating Rate Senior Subordinated Notes, and US$8 million Class E Floating Rate Notes. Guarantee of Korean Residential Mortgage-Backed Securitization. Representation of guarantor on the issuance of US$328 million Class A1 Guaranteed Secured Floating Rate Notes due 2014 and US$171.4 million Class A2 Guaranteed Secured Floating Rate Notes due 2024, on a pool of residential mortgage loans in Korea. This transaction constituted the second-ever cross-border mortgage-backed securities offering out of Korea. The transaction involved a 20-year cross-currency interest rate swap and unconditional 20-year swap. Financing of China's Landmark LNG Project. Representation of the Chinese project sponsor in a complex multitier financing of China's first liquefied natural gas (LNG) terminal and trunkline project, which is due on-stream in 2006. German Bank Structured Credit Agreement for Bermuda Insurance Company. U.S. secured credit facility provided by a German bank to a special-purpose Delaware LLC functioning as a "separate account" under a life insurance policy issued by a Bermuda-based insurance company to a Mexican national. Leveraged Lease Financing of Rolling Stock. U.S.-based multitranche leveraged lease financing of rolling stock fleet. Cross-Border Repo Financings. Large fundings of U.S. companies by foreign banks treated as secured financings for U.S. tax purposes.