Allen & Overy LLP acted for the joint bookrunners on the EUR3.4 billion increasable and extendable letter of credit facility for transportation manufacturer Bombardier.

 

The facility differs from a standard letter of credit facility by giving Bombardier the flexibility to increase its value or extend the terms with all or some of the banks or by bringing in new banks. This flexibility means Bombardier should not have to renegotiate the entire facility at the end of the original term, saving them time and money. The joint bookrunners were BNP Paribas, Commerzbank, Crédit Agricole CIB, Deutsche Bank, JP Morgan, Natixis, RBS and Société Générale in a syndicate of 36 banks.

Banking partner Michael Castle said: “As far as we or any of the banks are aware, this is the first time a letter of credit facility as flexible as this has been done. Achieving that flexibility was challenging but it was important for Bombardier given the significant part letters of credit play in the running of its business. The facility itself was well received by the market – at close of syndication, it was oversubscribed by EUR2 billion.”

The Allen & Overy team was led by banking partner Michael Castle with assistance from Mary Neave. Additional advice was provided by Allen & Overy in The Netherlands, Germany, Luxembourg, New York and Spain.