Designed to enable companies to finance the acquisition of real estate, improvements, and capital equipment, leasing transactions allow companies to benefit from certain tax-related structures. Winston & Strawn has been extensively involved in the leasing market, serving lessors, lessees, lenders, and arrangers in a wide variety of tax-oriented lease transactions involving equipment and facilities. Winston & Strawn has a diverse and sophisticated leveraged leasing practice. We regularly represent major leasing intermediaries, institutional lessors, and lessees.
We assist clients in leveraged leasing transactions involving aircraft, vessels, rolling stock, manufacturing equipment, satellites, and real estate, as well as large integrated facilities, such as automotive assembly plants and conventional and nuclear power generating facilities. We have been involved in a substantial number of cross-border transactions, many employing innovative structures covering a variety of transportation equipment and facilities. We have been active in the development of new structures in response to changes in the regulatory and tax environment, including §467 regulations. One of our leasing partners serves as co-editor of the three-volume treatise Equipment Leasing — Leveraged Leasing (Practising Law Institute, 1999).
Facilities and Real Estate. Another area of our practice consists of leveraged leases of commercial real estate, facilities, and projects. Many of these deals have involved office buildings, corporate headquarters complexes, retail shopping centers, and hotels, while others have included more traditional facility leveraged leasing, such as power plants and integrated manufacturing facilities. Our real estate practice has included the use of several innovative structures, such as bifurcating the ownership of land, and using partnerships, installment sales, like-kind exchanges, and concurrent lease structures. Our ability to structure innovative transactions is complemented by our experience with service agreements, accounting solutions, residual support, rent structures, and debt structures.
Aircraft. Our attorneys have acted as counsel, principally for equity, for leveraged lease aircraft transactions aggregating more than $10 billion in equipment costs. Domestic lessees that have been involved in these transactions include Air Wisconsin, Alaska Airlines, American Airlines, Continental Airlines, Delta Air Lines, Federal Express, Jet Acceptance (British Aerospace), United Airlines, Skywest, DHL, and Northwest Airlines. These transactions have included every type of major structure employed over the past several years, including like-kind exchange and turbo structures. Debt funding sources have included both private and public markets, including securitization markets and “467” loans. For example, we recently acted as counsel for the issuer in connection with an innovative, non-recourse back-leveraging transaction involving a multi-airline lease portfolio. Our cross-border work has involved numerous major international airlines. Winston & Strawn has represented lessees and lessors in connection with the lease of corporate aircraft and lenders in mortgage loans, including senior/subordinated loan structures.
Non-Aircraft Transportation Equipment. We have participated in transactions involving rolling stock leased to, among others, ACF, Amoco Oil, BSNF, Chicago & Northwestern, GATX, Occidental Petroleum, Trailer Train, Union Tank, TTX, TXU, First Union, and Union Pacific. We recently acted as counsel for the equity investors in the securitized financing of more than $200 million of railcars leased to a special-purpose affiliate of GATX Corporation; the deal was nonrecourse to both the lessee and the lessor.
The firm’s New York and Washington D.C. offices maintain a general admiralty/ maritime practice that assists in the firm’s vessel-leasing activities. Vessel transactions have included both inland and oceangoing barges, as well as passenger and cargo ships and offshore drilling rigs. We also have extensive experience with U.S. Citizenship requirements and in structuring benefits available under the Capital Construction Fund provisions of the Merchant Marine Act of 1936 and IRS Code Section 7518 into lease financing transactions. Winston & Strawn completed an innovative transaction involving three oceangoing vessels leased to a French-flagged multinational shipping operator and the first lease-to-service agreement transaction on a cruise ship.
Equipment. We have counseled clients in transactions to finance a diverse range of equipment, including mining equipment, natural gas production equipment, coal pulverization facilities, printing presses, windmills, and other power generation equipment, as well as a wide array of manufacturing equipment (including “qualified technological equipment”). We have represented several lessors from initial transaction documentation through residual realization.
Cross-border Transactions. Winston & Strawn remains a leader in innovative cross-border leasing structures. The firm is currently evaluating the application of a French credit bail to achieve a “double-dip” for wind turbines. We are currently completing a cross-border sale-license back of intangibles to create a net additional deduction in international tax planning.
Winston & Strawn was a major participant in the market for cross-border tax lease financings, including transactions involving the extraterritorial income exclusion and its predecessor structure, based on foreign sales corporation (FSC), both ownership and commission. Cross-border air and rail transactions in which Winston & Strawn has served as counsel have involved, among others: All Nippon Airways, Ansett, Australian Airlines, Canadian Airlines, Cathay Pacific, Air France, SFA (French postal service), Japan Airlines, KLM, Lufthansa, Malaysian Air Service, Qantas, Queensland Rail, Singapore Airlines, Singapore Cargo, China Airlines, and State Rail of New South Wales. Winston & Strawn also has been on the leading edge of facility and cross-border real estate tax lease financing.
Cross-border transactions completed in recent years outside the transportation equipment area include matters involving telecommunications equipment in Belgium, hotel properties located in the United Kingdom, Australia, Japan, and the Netherlands and gas and electric production and distribution networks in the Netherlands.
Portfolio Transactions. Winston & Strawn has extensive experience representing clients in the purchase and sale of lease transactions, as well as end-of-term buyouts and other equipment dispositions, transfers, and substitutions. We have represented clients as both buyers and sellers in transactions ranging in size from a single lease to portfolios involving hundreds of leases. We have handled all aspects of such transactions, including transfers of both debt and equity interests.