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Norton Rose Fulbright has advised Thera Capital Management on innovative funding arrangements to support agri-finance in Australia.
Firm: Norton Rose Fulbright (Thera Capital Management)
The programs provide a new way of raising domestic and offshore capital to Australian food and agricultural producers.
Value: Undisclosed.
Area: Investment fund.
Key players: The team was led by partner Vittorio Casamento with assistance from special counsel Adele Gray and lawyer Alex Field.
Deal significance: One of the programs is structured as a secured note issuance program that allows Thera to raise debt capital from domestic and offshore investors in multiple currencies.
The notes are issued by a special purpose vehicle (SPV) managed by Thera and investors can enter and exit their investment at various times during the program’s term. Returns on the notes are shared equally by the noteholders and are determined by the underlying performance of the finance transactions entered into by the SPV.
Mark Allen, chief executive of Thera, commented: “One of the key features of the note program is that it offers a unique and attractive ability for an investor to obtain a secured and uncorrelated fixed income return with reasonable liquidity.”
The second funding program was established and documented as a Shariah law-compliant investment, from the investment by the offshore investor right through to the deployment of funding to the local farmers.
The Norton Rose Fulbright banking and finance team assisted Thera with the documentation of Shariah law investment funding vehicle, which involved working with the offshore investors’ legal counsel in Dubai and Sydney.
The team drew on their international capabilities in Shariah law with valuable input and guidance from London-based partner Davide Barzilai to guide Thera through the process. They also liaised with Thera’s Shariah advisory board to ensure compliance with Shariah principles.
The first Shariah funding deals were completed in December 2019 to support local food and agricultural producers.
Mr Casamento commented on the completion of the deal: “We have been working with Thera since the inception of its agri-financing business and it was a privilege to work with the team to bring these two funding structures to market. These innovative funding structures give farmers real alternatives to traditional bank funding and opens up a new way for offshore investors to access this asset class.”
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Tony Zhang
