Continental: how to structure German law high-yield

Author: | Published: 23 Jul 2010

The first secured high-yield bond to be sold under the new German Bond Act has some innovative features, including the first trustee-like service. But it still had to be structured around gaps in the legislation.

Continental’s €750 million senior secured notes were the first to be sold since changes to German bond legislation meant that it became possible to amend bond terms post-issuance.

“Traditionally it’s been almost impossible to issue high-yield under German law because the old law did not provide sufficient flexibility for amending the covenants post-closing with majority bondholder consent.,” said Marc Plepelits, a partner at Shearman & Sterling who advised the initial purchasers on the transaction. “They were always done under New York or UK law so the...



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