Excellence Awards 2017 - Fellowship Award: Geoffrey Wynne

Awards | 1 August 2017


There are few names in any industry as synonymous with their field as Geoffrey Wynne is with trade finance. Few eyebrows were raised at TFR then, when his name was nominated more than any other for this prestigious award that recognises individual contribution to trade finance, but Wynne himself certainly wasn't expecting it.

"I'm surprised, but honoured," he said, speaking about what the award means to him.

"It is the first time that, at a personal level, an institution and its members have recognised the efforts that have been put in. And I have to say, I have enjoyed putting in the effort and I've enjoyed the challenge of trying to help move trade finance forward - that being recognised is very flattering."

John MacNamara, managing director, global head of structured commodity trade finance at Deutsche Bank said, "The only surprise about Geoff getting the Fellowship Award is that he didn't already have it somewhere in the cupboard, in fact several times over.

"Geoff has made a major contribution over many (many) decades not just to some of the genuinely landmark individual deals, but also to the generic market templates for documenting our sort of business, as well as to the evolution of thought as to how all this stuff works, all of which knowledge and experience he has shared with successive generations of younger lawyers who now form a diaspora of 'Geoff Wynne alumni' across the market. He really is the Grandad of Docs."

A champion of ensuring trade gets paid, Wynne's role as a solicitor has placed him in a unique position to influence the definition of trade and trade debt, the precedence that trade debt is given when a restructuring occurs, and he has been very vocal about the overregulation of an otherwise relatively lower-risk area of banking.

"I think we are slowly winning the battle with the regulators, but we have a long way to go and in some ways, time is short. I read depressing articles about banks pulling out of trade finance because of what they, quite rightly, perceive to be the over-regulation and great concern from regulators," he says.

"There are articles in this magazine and many others about how much trade finance is needed to finance trade, and I say, 'Look guys, can't you piece these two together? Can't you see that the more you make trade finance and trade debt a good place to be, the more you will get trade finance?' Compliance is the biggest problem that dissuades large banks from doing trade and that point is now recognised. If that point were recognised by regulators, I think we would have more banks doing trade."

Defining true trade

Trade finance professionals have certainly complained about the burgeoning of compliance since the 2008 financial crisis because, as the argument goes, it wasn't letters of credit that led to the crisis.

Regardless of where the blame lies, few industries escaped from it unscathed, and that includes trade. For Wynne, this meant working on a restructuring in Kazakhstan that he calls a "fascinating transaction", where banks across the country collectively found themselves stuck with over US$15bn in foreign debt.

"Alliance Bank was the first of the Kazakh banks that was restructured. We acted for the steering committee and I was the lead lawyer. In the discussions, Alliance had a whole mixture of creditors. Some of the things they were doing were either trade related or proper trade finance. They opened the discussion on a restructuring when they said, 'We can't pay everyone, but we would like to pay trade creditors'. So if you like, they started it and that helped," says Wynne.

"It was a mixed steering committee of banks, some of them had what they would regard as proper trade, some who were doing synthetics, some who were doing working capital, and we slowly got into a definition of trade debt that everybody was prepared to recognise as true trade. So, we crafted a definition of trade debt, which said it was a real underlying transaction involving, in that case, import or export of goods into Kazakhstan."

This meant that "some of the synthetic transactions, designed just to give working capital, did not have goods moving in and out of Kazakhstan and therefore, there was nothing wrong with them, but they were not benefitting the trade of the country," he adds.

As a result, Wynne's trade deals at Alliance were paid 100% even when haircuts of up to 70% were being taken by others. The case supported the mantra that 'trade gets paid' (which has no legal backing) and also fed into the receivables area, where companies who had the payables began to prioritise their suppliers and chose to restructure those who had financed their working capital - Wynne had tangibly contributed to ensuring trade gets paid.

Confidence is everything

As well as ushering in a new age of regulation, the 2008 financial crisis also had a negative effect on financial institutions' confidence and their appetite to support new trade deals. Again, Wynne's role as a solicitor has placed him in a unique position to bring back confidence to the market, especially with new entrants to the space.

"I've been asked what the smallest size deal we would do is. Some years ago I might have said US$5-15m, but actually, I'm now doing first-time deals worth around US$1.5m on a structured basis, banks and non-bank financial institutions testing it out, and then those planning to increase. I'm talking to several clients right now who have said, 'I like this. Perhaps if I do this, we'll do a small one and if it works, we'll go bigger'. These people are now saying, 'I now want to do bigger deals. I can't on my own balance sheet, but I can find them and if you help me structure them, we will then sell down'. The market is more vibrant than people believe, but it's a different market."

With the quality of his work winning him the confidence of trade financers, it was the confidence Sullivan & Worcester showed in him four years ago that Wynne is most proud.

"When I started the office for Sullivan & Worcester nearly four years ago, it was an expression of confidence that they wanted me and they wanted me to head the office. It was an expression of confidence that a large number of my assistants were prepared to join me. But most importantly, it was the fact that clients recognised me and the team and we made an immediate impact on the market.

"Four years ago, you would not have considered Sullivan & Worcester one of the best, or the best, trade finance law firm. To achieve that probably tops anything else that I have done, and I have had what I would regard as an interesting career."

Jean-François Lambert, former managing director and head of structured commodity and trade finance at HSBC, and now managing director of Lambert Commodities, said of Wynne's Fellowship Award, "If one lawyer deserves the industry's recognition, it is Geoffrey Wynne. Geoffrey has been supporting most commodity banks for many years, whether in good and bad times, advising on deals and restructurings, on regulation and governance.

"He is passionate about this business and has always been keen to share his vision and experience through presentations and discussions in many forums in a very open and clear manner. Acknowledging his contribution is therefore totally appropriate."

Duarte Pedreira, head of trade finance at Crown Agents Bank added, "Geoffrey Wynne is one of the most prominent opinion leaders in the trade finance industry. Through multiple public interventions and numerous industry projects, Geoff has been key in crafting the way that trade finance has evolved over time, becoming ever more relevant as it adapts and adjusts to shifting client demands."

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