The first high yield issue under a so-called double luxco
structure has proved it is possible to protect junior creditors
in French leveraged buyouts (LBO). It also sets a high
benchmark for banks negotiations with subordinated
lenders in future deals.
Like most recent French LBOs, Lion Capitals
acquisition of frozen food company Picard (for 1.6
billion) earlier this month used a double luxco structure.
Whats different is that 300 million of the price
tag was funded through high yield debt.
People said that implementing a double luxco structure
that incorporated high yield notes would be difficult,
said Ward McKimm, a London partner with Shearman & Sterling
who acted for the high-yield underwriters.
This is because in previous double luxcos the
subordinated instrument was mezzanine, which had been content
with fewer protections on enforcement, he said.
But closing the deal...