European outlook: Trustee experience more important than ever

April 11, 2023

Even in this period of economic uncertainty, a variety of unique growth opportunities are emerging in European debt and loan markets. Identifying and securing deals in this landscape often entails complex transactions – which means you need a trustee at the top of their game.

Finding and executing deals in today’s unpredictable European marketplace requires the support of partners working from the highest levels of experience and expertise. Many of today’s trustees are stretched to their limit in terms of what’s being asked of them. Some have the flexibility, technology, global network and breadth of services to embrace these challenges, and some are less equipped to adapt.

This article will examine how the European market is changing and how those changes are raising the bar for trustees moving forward.

Venturing into new markets

One hallmark of the evolving European marketplace is that more investors are exploring opportunities in new jurisdictions. This presents numerous legal and structural hurdles – testing the ability of trustees to extend beyond their traditional roles. Increasingly, investors are leaning on their trustees to provide specific guidance and insights related to the assets they administer and the domains where those assets reside.

Today’s trustees must keep abreast of emerging opportunities and the intricacies of new markets. They should be able to manage complex transactions, protect the interests of their investors and effectively engage with all parties – from accountants to attorneys to anyone else involved.

Relying on trustee expertise: three examples

In 2022, the European market saw some unique, high-profile transactions driven by clients seeking to explore the growth, exposure and regulatory opportunities of new domains. U.S. Bank, as trustee, helped facilitate a number of these transactions. Here are three examples of how clients leveraged our knowledge and experience to navigate the risks and requirements of various jurisdictions.

  • Fiber BidCo SpA (Italy):
    •  This EUR 1.1 billion deal – a five-year bond – is the first known example of a bond issued using a cashless roll structure. This structure, more frequently seen in loan market deals, gives floating-rate noteholders the option to rollover their existing notes by exchanging them for new floating-rate notes on a cashless basis in a private exchange offer.
    • U.S. Bank served in the roles of note trustee and paying agent, registrar and transfer agent and calculation agent to help bring this deal to a successful close.
  • Barcelona La Liga television rights – Sonlex Adjacent SARL (Spain):
    • This high-profile deal is the first known deal securitizing the television rights to a Spanish football club in accordance with the recent La Liga broadcasting agreement.
    • U.S. Bank served as security agent for this deal, a role grounded in our ability to take security in a wide range of assets.
  • Britain’s Got Talent Star Notes Issuer 2022-1 Limited and Star Receivables Limited (UK): 
    • This $125 million deal is a securitization of the asset-backed-security (ABS) royalty proceeds for the Got Talent European television production.
    • U.S. Bank served in the roles of security agent, account bank, facility agent, registrar and trustee – as well as providing administrative services to the two separate entities.

Each of these deals required proactive thinking and deep expertise to align the clients’ goals with the strategic and tactical approaches necessary to achieve them. Beyond that, it took a highly skilled team communicating consistently and working in unison to achieve cost and efficiency savings.

Increasing complexity

In today’s economy, transactions are becoming more intricate, and this trend seems set to continue. Each deal is unique – with its own specific structure, challenges and requirements. The more intricate the transaction, the more challenges it creates for clients.

Challenges compound when an agent can’t keep up with the pace of evolving expectations. Poor document management, lack of agility or limited experience with certain instruments can lead to inefficiencies, added expenses or – even worse – missed opportunities.

What to look for in a European trustee

To thrive in the current European marketplace, investors should find a trustee that can show clear proof of a successful track record. They should be able to demonstrate, with examples as evidence, how they improved market position and market ranking. If they can’t, it might be time to explore new partnerships.

Several additional qualities investors should look for in their trustee include:

  • Advanced knowledge of new markets
  • An ethos of embracing challenges and complexity
  • A strong background managing multiplex deals in diverse jurisdictions
  • The ability to be commercially aware, respecting a client’s time and costs
  • An understanding of the key ramifications of managing and executing a deal
  • Detailed cash, currency and investor reporting
  • Agility, flexibility and responsiveness
  • Proactive communication

What the future holds

The outlook for European markets into this year and beyond remains unclear. Rising interest rates, geopolitical conflict and numerous other factors will shape the investment landscape as the next decade unfolds. The only prediction that seems assured is that change will continue to occur.

At U.S. Bank, we have the experience, reach and technology to navigate the mechanics of complex deals with transparency, consistency and unwavering quality. As new opportunities emerge in the European debt and loan market, we can help you understand some of the new legal and structural hurdles in this evolving market. Learn more about our European trustee solutions or connect with one of our global corporate trust experts.

 

For more information about our European trustee solutions, please contact our team here.

Related content

At your service: outsourcing loan agency work

Employee benefit plan management: trustee vs. custodian

Accommodating the growing complexity of private equity funds

Depositary bank and collateral agent

Rethinking European ETFs: Strategy wrappers and a means to an end

Ask an expert Q&A: European CLO market outlook

Maximizing your infrastructure finance project with a full suite trustee and agent

Bank vs. brokerage custody

5 simple steps for your M&A escrow

High-yield bond issuance: how to avoid 5 common pain points

High-yield bond issuance: 5 traits lawyers should look for in a service provider

Alternative fund servicing: bank or boutique?

Preparing for your custodian conversion

How digital platforms streamline client onboarding for investment funds

3 European market trends to watch

European outlook: Trustee experience more important than ever

Trends in economics, immigration and mobility policy

Emerging trends in Europe: An outlook from multiple perspectives

Rule 18f-4: The limited use exception

Liquidity management: A renewed focus for European funds

Administrator accountability: 5 questions to evaluate outsourcing risks

The ongoing evolution of custody: Tips for renewing your custody contract

3 innovative approaches to ESG investing in Europe

Ask an expert Q&A: 3 US ETF trends and their impact in Europe

Case study: U.S. asset manager expands to Europe

Key considerations for launching an ILP

An investor’s guide to marketplace lending

For small business growth, consider the international market

Ask an expert Q&A: 3 US ETF trends and their impact in Europe

Programme debt: 3 IPA lessons learned through experience

Mutual fund to ETF conversions: challenges and considerations

Direct lending trends in Europe

The benefit of a multi-jurisdictional European trustee

The role of a custodian

Ask an expert Q&A: automation and artificial intelligence trends in Luxembourg

Investment management platforms: Easily enter the Irish funds market

What goes into private equity fund calculation?

Luxembourg private capital growth demands your attention

Programme debt clients want reliable service – no matter where they’re based

European loan agency: finding the right balance of agility and stability

Easing complex transactions: Project finance case studies

Cryptocurrency custody 6 frequently asked questions

Luxembourg's thriving private debt market

6 benefits of a multiple-role service model for European funds

Luxembourg funds: 5 indicators of efficient onboarding

Easier onboarding: What to look for in an administrator

ESG-focused investing: A closer look at the disclosure regulation

3 questions to ask your equity, quant and CTA fund administrator

4 reasons your Luxembourg fund needs an in-market administrator

Combined strength: Luxembourg and your fund administrator

Top 3 considerations when selecting an IPA partner

5 questions you should ask your custodian about outsourcing

The secret to successful service provider integration

10 ways a global custodian can support your growth

The reciprocal benefits of a custodial partnership: A case study

The benefits of a full-service warehouse custodian

The unsung heroes of exchange-traded funds

Depositary services: A brief overview

4 questions you should ask about your custodian

Refining your search for an insurance custodian

Service provider due diligence and selection best practices

Inherent flexibility and other benefits of collective investment trusts

Crack the Swift code for sending international wires

Managing complex transactions: what your corporate trustee should be doing

Digital processes streamline M&A transactions

4 benefits of independent loan agents

Middle-market direct lending: Obstacles and opportunities

An asset manager’s secret to saving time and money

Start of disclosure content

Disclosures

U.S. Bank Global Corporate Trust is a trading name of U.S. Bank Global Corporate Trust Limited, U.S. Bank Trustees Limited and U.S. Bank Europe DAC (each a U.S. Bancorp group company). U.S. Bank Global Corporate Trust Limited is a limited company registered in England and Wales having the registration number 05521133 and a registered address of 125 Old Broad Street, Fifth Floor, London, EC2N 1AR. U.S. Bank Global Corporate Trust Limited, Dublin Branch is registered in Ireland with the Companies Registration Office under Reg. No. 909340 with its registered office at Block F1, Cherrywood Business Park, Cherrywood, Dublin 18, Ireland D18 W2X7. U.S. Bank Trustees Limited is a limited company registered in England and Wales having the registration number 02379632 and a registered address of 125 Old Broad Street, Fifth Floor, London, EC2N 1AR. U.S. Bank Europe DAC, trading as U.S. Bank Global Corporate Trust, is regulated by the Central Bank of Ireland. Registered in Ireland with the Companies Registration Office, Reg. No. 418442. The liability of the member is limited. Registered Office: Block F1, Cherrywood Business Park, Cherrywood, Dublin 18, Ireland D18 W2X7. Directors: A list of names and personal details of every director of the company is available for inspection to the public at the company’s registered office for a nominal fee. In the UK, U.S. Bank Europe DAC trades as U.S. Bank Global Corporate Trust through its UK Branch from its establishment at 125 Old Broad Street, Fifth Floor, London, EC2N 1AR (registered with the Registrar of Companies for England and Wales under Registration No. BR020005). Authorised and regulated by the Central Bank of Ireland. Authorised by the Prudential Regulation Authority. Subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. In Luxembourg, U.S. Bank Europe DAC trades as U.S. Bank Global Corporate Trust through its Luxembourg Branch under RCS number B244276 with its registered office at 4, rue Albert Borschette, L-1246 Luxembourg, and is regulated and authorised by the Central Bank of Ireland (CBI) as well as by the Commission de Surveillance du Secteur Financier (CSSF). Details about the extent of our authorisation and regulation by the CBI and the CSSF are available from us on request. All banking services are provided through U.S. Bank Europe DAC. U.S. Bank Global Corporate Trust Limited and U.S. Bank Trustees Limited are Trust Corporations and not banking institutions and are not authorised to carry on banking business in the United Kingdom, Ireland or any other jurisdiction.

All banking services are provided through U.S. Bank Europe DAC. U.S. Bank Global Corporate Trust Limited and U.S. Bank Trustees Limited are Trust Corporations and not banking institutions and are not authorised to carry on banking business in the United Kingdom, Ireland or any other jurisdiction.

U.S. Bank National Association is not responsible for and does not guarantee the products, services, performance or obligations of its affiliates.

Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, Home Equity and Credit products are offered through U.S. Bank National Association. Deposit products are offered through U.S. Bank National Association. Member FDIC.