Unitas Capital’s May 2011 purchase of Netherlands-based hydraulics firm, Hyva Holdings, sets a structural standard for future acquisitions in the region.
The $723 million acquisition from 3i is the first sponsor-backed acquisition in Asia to be fully-financed by high yield bond. The $375 million Rule 144a/Reg S bond offering of 8.625% senior notes due 2016 replaced bank loans initially put in place at the time of the bidding.
Its covenants fused US and European elements with Asian market practices to give bondholders deeper protection than previous high-yield products in the region.
The deal secured share pledges, intercompany loans and banks accounts in China, India, Brazil and Europe. It also incorporated streamlined intercreditor terms in covenant packages on all debt instruments involved, including a...