Europe’s back leverage market has swelled recently. In this episode we consider the limitations of the label “back leverage”, explain what it covers, why it matters, and where it’s headed. We also offer several practical pointers for structuring transactions effectively.

Back leverage in European real estate finance has grown rapidly. It attracts serious capital – but remains notoriously difficult to define. It goes by pseudonyms such as debt-to-debt or loan-on-loan but nothing quite captures what this market has become.

In this episode, Ashurst partner Ruth Harris is joined by special guest AJ Storton, a partner at Art Capital, to get into the nitty gritty and the bigger picture. They explain exactly what back leverage is and explain why “structured leverage” might be a more useful term.

They also discuss the motivations on each side of the trade (users and providers) and the documentation questions that determine how a transaction is actually structured. There’s also a handy summary of securitisation compliance obligations, and  crucially – the “top 10” structural features that any party to these transactions needs to nail.

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The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. Listeners should take legal advice before applying it to specific issues or transactions.