Restructuring High Yield Bonds

Transcription

1 Restructuring High Yield Bonds Examining market techniques, methods and tools used to restructure high yield bonds A 1-Day Course This in-house course can also be presented face to face in-house or via live inhouse webinar for your company The Banking and Corporate Finance Training Specialist

2 Course Objectives Participants will: Be introduced to the bond restructuring route map Learn to identify the restructuring triggers Get to grips with gaining leverage in restructuring situations Explore the summary of liability management techniques its application, pros and cons Be taught Course about Overview Coercive Exchange Offers Gain an understanding of the Trust Indenture Act Gain an appreciation of tender offers and consent solicitations Learn about pathways schemes of arrangement, Chapter 11 and administration Explore other problem areas in bond restructurings Have an understanding of stabilization & liquidity Get to grips with the draft EU Harmonisation Directive on restructuring Course Content Introduction Bond Restructuring routemap: overview of the stages in the process Overview of current Loan/ Bond structures (what s market) SSRCF/Senior Secured Notes Pari Loan/ Bonds Double Luxco has back on the agenda Restructuring triggers Review of the key EoDs in Notes Key EoDs in Loans which will trigger earlier than Notes Asymmetry of information between Loans and Notes Other aspects which may give lenders a head start over the Notes Gaining leverage Key voting thresholds for Notes Problem areas One Euro One vote the Schmolz problem in Germany legislation Numericable s change of voting cap The Bakkavor problem & hedging issue (Who controls the Restricted Group) Key voting thresholds for loans (vis-a-vis the Notes) Impact of distressed disposals & release of collateral pre and post distress Pathways - Chapter 11 and Administration General application and founding jurisdiction Procedure & voting thresholds Key benefits Automatic stay - Worldwide impact (practical application) Cherry picking contracts Assets sales DIP funding Cram-downs and Cram ins Review of Truvo Administration & pre-packs Review ATU flip-up case Case Review: CGG Restructuring US and French options

3 Other problem areas in Bond restructurings CoMi & Jurisdiction issues Organising the Bondholders Relationship between the issuer, trustee and bondholders Identifying the Bondholders difficulties and tactics Standstill Agreements Lockup Agreements Reporting requirements Obtaining information problem areas Insider dealing, Fraud and other issues US anti-fraud UK & EU rules and regulations Impact of CDS on restructuring How it matters q.v. Truvo Stabilization & liquidity Standstills re the Issuing Group positive and negative Liquidity the options and requirements New shareholder funding Payment extension and deferment techniques New debt incurrence via the HY indenture sources and problems Take-outs Review of Towergate solution for liquidity Issues affecting junior Notes / mezz etc Standstills (on junior Noteholders and other creditors) Payment Stop notices Draft EU Harmonisation Directive on restructuring Background The three minimum key elements Review of the Key principles Relevance of Brexit Background of the Trainer The trainer is a consultant, public speaker and author. He provides training programmes globally to a blue-chip client base on private equity, debt finance, loan documentation and restructuring. He is a senior consultant with Debt Xplained, with Grant Thornton UK (Debt Advisory) and is also a Senior Advisor to KPMG Finland. He has spoken at conferences in the UK, Europe, Australasia & South Africa. He provides training to a wide range of clients on a bespoke in-house basis & publicly through Redcliffe Training Associates. Additionally, he is the Programme Director for the infrastructure / project finance module for the MBA programme at the Cass Business School in London. Course Summary The programme will review the impact of the draft ECB guidance on leveraged transactions.

4 Restructuring high yield bonds pose a range of challenges not found in dealing with purely loan-driven structures; custody chains means that noteholders are more difficult (and take longer) to identify; the listed nature of notes means that all stakeholders need to be aware of market abuse aspects; the machinery for instituting action in bonds is more convoluted than loans, since notes are invariably governed by NY State law restructurings may need to take account of compliance with onerous U.S. securities laws and last, bond restructurings often use different tools not available in loan structures, such as Exchange offers and consent solicitations (which can be used to covenant strip notes in certain circumstances). The market has also experienced an increase in coercive exchange offers where parties have made use of innovative solutions to encourage holders to accept and discourage holdouts from remaining on the side-lines. DTEK s triple track Exchange offer, Scheme and consent solicitation being an excellent example. This programme summarises the methods and tools that have been used to restructure bonds and reviews some of the topical and innovative solutions that have been used to address these more complex restructurings. English schemes of arrangement have gained increasing traction in the bond markets, as they have in the loan markets, and appear to have emerged as the primary pathway of choice in a number of recent restructurings for foreign companies. Despite this Chapter 11 does offer some solutions not available in a Scheme, for example where operational restructuring is required. The programme will illustrate these methods with discussions of recent landmark restructurings including; Zlomrex (parallel Exchange offer and Scheme), Metinvest (Standstill Scheme), Privatbank, Edcon, Codere. The course will also review the current potential cross-border restructuring options for CGG Restructuring which potentially could involve either US or French pathways or both simultaneously. The programme will also review the key points of the Draft EU Directive harmonising restructuring and insolvency matters published on 22nd November What Redcliffe clients are saying about the course: The trainer had such great breadth of knowledge on the topic. --Senior Associate, DLA Piper Wide range of information covered and helpful handouts. Well presented! --Associate, Weil, Gotshal & Manges LLP Relevant and interesting case studies --Partner, BDO LLP

5 Tailored Learning All of our training courses can be tailored to suit your company s exact training needs. We will work closely with you to help develop a training programme with content that is unique for your organisation. Please us on enquiries@redcliffetraining.co.uk for more information E-Learning This course can also be presented as a bespoke e-learning programme created by you to fit your exact requirements.