High yield benchmark for French corporates

Author: Danielle Myles | Published: 22 Feb 2011

French diagnostics company Labco opened the year’s European high-yield market with its €500 million debut bond. Compared to the private equity-driven offerings that dominate the French market, the issuer’s complicated ownership structure introduced extra considerations under the country’s regulations.

For the country’s high-yield lawyers, a corporate choosing to refinance this way is relatively uncommon. "It was interesting to see a widely-held French corporate seeing the benefit of issuing high yield," said Ward McKimm from Shearman & Sterling who acted for the issuer.

Its collection of subsidiaries presented issues under French regulations. Despite appearing on its consolidated balance sheet, Labco lacked majority voting power in many of the group’s entities. Extra...