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...