VDB Loi assists as aircraft financing transaction closes in the wake of Cape Town Convention ratificationNovember 27, 2014
VDB Loi, a leading Myanmar law and advisory firm with offices in Yangon and Nay Pyi Taw, has assisted a foreign non-bank financial institution with a financing transaction involving a number of aircraft for use in several countries including Myanmar. The names of the lender and the borrower are not disclosed at this time. The firm acts as lender’s Myanmar counsel and was charged with, among other things, Myanmar law advice on the facility document and security package, the funding structure and due diligence. The firm is also charged with the registration and perfection of the secured interests in Myanmar.
The transaction comes in the wake of Myanmar’s implementation of the Cape Town Convention (CTC), a 2001 multilateral treaty acceded by Myanmar which regulates the creation and enforcement of international security interests on mobile equipment such as aircraft. Myanmar implemented the CTC through the enactment of a special law called “The International interests in Mobile Equipment (Aircraft Equipment) Law” (The 2014 Pyidaungsu Hluttaw Law No. 37) on 1, August, 2014 (the Implementing Law). Under the CTC and its Myanmar Implementing Law, an international security interest created and registered in accordance with the CTC will be recognized and enforceable in Myanmar. Under the Implementing Law, a supervisory authority will be formed in the framework of the Ministry of Transport’s Department of Civil Aviation.
The firm’s partner in charge of this assignment, Edwin Vanderbruggen, said “The ink on the Myanmar law implementing the Cape Town Convention is not yet dry, so as is often the case in Myanmar extensive consultations with the authorities were necessary for this ground breaking deal, one of the very first of its kind. The recognition and enforcement of an international interest on aircraft leased here in Myanmar will definitely increase the sense of comfort of foreign lenders and thus hopefully bring down financing costs for borrowers”.
Earlier, still in the financing space, VDB Loi was tapped to assist Pan Asia Towers with the first international non-recourse loan by a consortium of international commercial banks. The firm is also lender’s Myanmar counsel to an international development bank on a financing transaction in the financial services sector, and advises a number of foreign banks on their market entry in Myanmar following the awarding of bank licenses to 9 foreign banks by the Central Bank of Myanmar. VDB Loi also made news advising the Myanmar Government on the privatization of a number of state owned enterprises. Besides Myanmar, VDB Loi has additional offices in Cambodia, Indonesia, Laos and Vietnam, and liaison offices in Singapore and Tokyo.