International law firm Dechert LLP advised long standing client Carlson Wagonlit Travel, a global leader specialising in managing business travel and meetings and events, on its issuance of US$465 million 6.785% Senior Secured Notes due 2019 and €300 million 7.500% Senior Secured Notes due 2019. The lead initial purchaser was JP Morgan, and co-leads were BNP Paribas, Jefferies, Lloyds and Morgan Stanley.
The proceeds from the offerings were used to repay in full Carlson Wagonlit Travel’s existing senior bank term loan and for the redemption of its outstanding subordinated high yield notes.
In connection with the offering, Carlson’s Wagonlit Travel’s existing revolving credit facility was replaced with a new US$100 million revolving credit facility, which has a “super-senior” structure that is becoming the norm in Europe.
The offering represents one of Europe’s major high-yield issuances in 2012. The dual currency structure of the offering was primarily a function of the stronger US markets and the lingering anxiety in European markets. With bank credit tight due to regulatory, commercial and financial concerns associated with European banks, senior bank loans for European companies are increasingly being refinanced in full with high yield debt. The revolver is pari passu with the senior secured notes in terms of ranking, but senior in respect of proceeds of collateral upon enforcement. This structure of a “super-senior” revolver alongside a senior secured bond is becoming the preferred financing tool for leveraged European companies.
The cross-border Dechert team advising Carlson Wagonlit Travel was led by London corporate partner Wayne Rapozo, assisted by associate Javad Husain and associate Amy Grammer, with London finance partner Corinna Mitchell and associate Jaimee Bickle advising on the intercreditor arrangements governing the relationship between the intercreditor agreement and the senior secured notes in respects of enforcement.
Tax advice was provided by partners Daniel Dunn and Edward Lemanowitz on US and international aspects and David Gubbay on UK and Euro-zone tax aspects.
