Australian agricultural producers have a new way of raising domestic and offshore capital
Norton Rose Fulbright’s (NRF) experts have played a key role in giving Australian agricultural producers a new way of raising domestic and offshore capital.
The firm advised Thera Capital Management in the establishment of two novel funding programs.
One program uses secured notes issued by a special-purpose vehicle managed by Thera. Investors, both domestic and offshore, can enter and exit investments at various stages of the program’s term. Returns on the notes, which are determined by the underlying performance of the finance transactions entered into by the vehicle, are shared equally by noteholders.
“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,” said Mark Allen, Thera chief executive.
The other program is structured and documented as a Shariah law-compliant investment, beginning from investment by the offshore investor through to deployment of funding to local farmers. Razvan Mondoca, chief investment officer, said that the Shariah law-compliant program allows “a very large and important pool of investors” to have “unique access” to the Australian food and agricultural investment market.
NRF said that its banking and finance team’s work on the documentation of the Shariah law investment-funding vehicle included 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,” NRF said.
The firm said that the first Shariah funding deals were completed in December and have supported local food and agricultural producers in Australia.
NRF’s team was headed by partner Vittorio Casamento, who was assisted by special counsel Adele Gray and lawyer Alex Field.
Casamento said that NRF has been working with Thera, a food and agricultural trade-finance asset manager, since the inception of its agri-financing business. “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,” he said.
