Credit and Special Situations

We deliver opportunistic, distressed and event-driven transactions effectively and with the minimum of fuss, no matter how they might change course

Our team of special situations lawyers advise the full spectrum of financial sponsors who provide private financing and other capital solutions spanning the debt and equity spectrum to companies that, for a variety of reasons, are unable to access more traditional sources of financing and investment. 

We draw upon the experience, knowhow and insight of market-leading individuals and teams across all key disciplines, sectors and geographies, having the shared goal of supporting financial sponsor clients who deploy capital in opportunistic, distressed and/or event-driven situations. 

Our sophisticated understanding of the markets in which our clients operate and the challenges they regularly face, together with our collaborative and client-focussed culture, enables us to deliver innovative structures for the deployment of capital in ways which protect against downside risk but maximise the opportunity for upside returns.

We regularly work with clients through the lifecycle of their investment to help unlock that upside potential (including the implementation of incentive arrangements, new governance structures and divestment strategies) and generate returns through refinancing transactions, disposals or consensual or non-consensual restructuring processes. 

Germany is preparing for a new restructuring regime to come into force from January 1, 2020. This means that there will be a "German scheme" in future, with new options for insolvency-preventing restructuring of businesses in Germany.

Notable deals

CVC (in its capacity as shareholder) and Lecta group:

Advising on the restructuring of the capital structure of the Lecta Group, a pan-European premier paper and packaging producer including a debt-to-equity swap of the bondholders.

Davidson Kempner:

Advising on the acquisition of a EUR 239m (GBV) portfolio comprising two tranches of non-performing loans secured and unsecured originated by Caixa Económica Montepio Geral, Caixa Económica Bancária, S.A.

“Euro PP” bondholders (holding EUR 60M) of Alès Groupe:

Advising on several rounds of restructurings including the renegotiation of the debtor’s financial indebtedness.

Strategic Value Partners:

Advising on various transactions, including:

  • on the acquisition and related financing of Eggborough Power Station.
  • on the refinancing and subsequent sale of Linpac to Klockner Pentaplast. 
  • on the acquisition of Dolphin Drilling and subsequent equity and debt financing arrangements.

Och-Ziff (now Sculptor):

Advising on a bridge loan made as part of a comprehensive corporate restructuring solution for a Benelux manufacturer.

PIMCO:

Advising on its investments in convertible preference share structures in Qualco and Finance Ireland.

A global hedge fund:

Advising on a bespoke "back-leverage" arrangements provided by a top-tier investment bank.

TPG Special Situations Partners:

Advising on the acquisition of Raissa fund property portfolio.

The ad hoc committee of senior lenders:

Advising on the restructuring of the Pelican Rouge group and its subsequent sale to Selecta.

M&G credit funds:

Advising on their £800m disposal of Alliance Medical to Life Healthcare.

King Street, Blackstone Real Estate Debt Strategies, M&G, LaSalle Investment Management, Tyndaris, PIMCO, Apollo and Cerberus:

Advising on various direct lending real estate finance transactions, including senior, stretch senior, mezzanine, distressed, special situations and NPL financings.

The Sellers (including Strategic Value Partners):

Advising on the c. £1.6bn sale of Cory Riverside Energy to a consortium led by Dalmore Capital.

DK Partners:

Advising on the work-out of Project Castle, a portfolio of loans from Bankia backed by hotels in Spain.

Apollo:

Advising on the acquisition of a REOs portfolio from Banco Santander.

Cerberus:

Advising on several NPL and real estate portfolio acquisitions and acquisition financings from Portuguese banks totalling €1.4bn GBV.

A large Canadian pension fund:

Advising on the €1.19bn commitment to a new European credit platform.

Cheyne European Strategic Value Credit:

Advising on the € 96m distressed financing of Lacrem, a well-known Spanish ice cream company.

Davidson Kempner:

Advising on the acquisition of a EUR 239m (GBV) portfolio comprising two tranches of non-performing loans secured and unsecured originated by Caixa Económica Montepio Geral, Caixa Económica Bancária, S.A.

“Euro PP” bondholders (holding EUR 60M) of Alès Groupe:

Advising on several rounds of restructurings including the renegotiation of the debtor’s financial indebtedness.

Insights and Thought Leadership reports

New Act introduces the “Dutch Scheme”

On 6 October 2020, the Dutch Senate approved the legislative proposal for the Act on Confirmation of Extrajudicial Restructuring Plans (Wet homologatie onderhands akkoord (the “WHOA”)). 

The WHOA establishes a new pre-insolvency procedure to restructure debts of companies in financial distress (the “Dutch Scheme”). The WHOA borrows elements from frequently applied foreign restructuring tools, such as the US Chapter 11 proceedings and the UK Scheme of Arrangement, combining these into a single framework.

Read more New Act introduces the “Dutch Scheme”

Playing politics with distressed M&A

The checks and balances of the merger control process are never more important than in times of crisis. But we are already seeing signs that crisis-driven M&A reviews will face intense political pressure.

Meanwhile, authorities have been bracing themselves for a surge in failing firm defence claims. Traditionally met with scepticism, will they gain traction through the Covid-19 lens?

Read more Playing politics with distressed M&A

Understanding how confidentiality regimes affect debt trading

When an investor is looking to engage in secondary debt trading, it must confront a perplexing array of legal, regulatory and best practice issues. Debt market participants will typically need to address several key issues in the context of debt trading which arise from the potential asymmetry and nature of information held by the parties.

Information concerns will become especially heightened when an investor is looking to trade their debt during a restructuring. Confidential information may be regulated by a combination of legal, regulatory and market practice regimes.

Read more Understanding how confidentiality regimes affect debt trading

SEC expands accredited investor and QIB definitions

Amendments will increase pool of investors allowed to participate in Regulation D and Rule 144A offerings

In a modest shift in the way it has traditionally viewed natural person investors in private offerings, the US Securities and Exchange Commission (the “SEC”) has adopted amendments that will expand the definition of “accredited investor” under Regulation D to include additional means of measuring a natural’s person financial sophistication, rather than focusing only on the person’s income or net worth. The final amendments also add new categories of entities to the definitions of both “accredited investor” under Regulation D and “qualified institutional buyer” (“QIB”) under Rule 144A.

Read more SEC expands accredited investor and QIB definitions

What we now know about Part 26A Restructuring Plans

Part 26A of the Companies Act, which was inserted under the Corporate Insolvency and Governance Act 2020, introduced a new restructuring procedure referred to as a "Restructuring Plan” or “super scheme”. The success of the new procedure will depend on stakeholders being persuaded that there are good reasons for using a Restructuring Plan rather than going down the tried and tested Scheme of Arrangement route.

This briefing looks at the potential benefits of using the new Restructuring Plan and considers, having regard to the Virgin Atlantic Restructuring Plan which was sanctioned on Wednesday 2 September 2020, the extent to which issues raised when the new legislation came into force on 26th June have now been resolved.

Read more What we now know about Part 26A Restructuring Plans

Covid 19 Financing Fund Portfolio Investments Through the Crisis

Financial sponsors have been focussing significant time, efforts and resources supporting their portfolio investments through the COVID-19 crisis. This briefing note considers some of the options available to sponsors to provide cash injections into portfolio companies in need of funding, both in the short term and the longer term.

Read more Covid 19 Financing Fund Portfolio Investments Through the Crisis

Liquidity options under European cov-lite facilities

In covenant-lite transactions, the absence of ongoing financial maintenance covenants, which have traditionally operated as the trigger for a debt restructuring, means that it is the lack of sufficient liquidity which will instead be one of the more likely factors leading to the commencement of a restructuring process.

Read more Liquidity options under European cov-lite facilities

Debt buy-backs of European leveraged loans

The European leveraged loan market has, as a whole, been affected by the economic consequences of recent government decisions and central bank action. As a result, the trading price of several leveraged loan names has fallen, in some cases, significantly below par. 

Read more Debt buy-backs of European leveraged loans

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