Lawyer Monthly Magazine - August 2019 Edition

Borrowing and Lending Transactions: The Trends financing instead of a more traditional bank. In light of the ‘rule of six’ (which regulates the number of lending institutions that a borrower may engage in discussions with), being able to interact with a single credit fund for all of the lending needs for a particular transaction has proven to be desirable to private equity houses. Finally, it is clear that more and more companies are finding themselves dealing with stressed or distressed situations with a capital structure that is considered difficult to sustain in the long-term. There is much market commentary on many of these types of names but there remains an ever-growing need for practitioners across the finance and legal industries with both a financing and a restructuring background that are able to navigate these ‘special situations’ and the associated issues. We can see from the previous cycle that distressed can provide their investors with significant returns at the right time. What are the different methods for handling debt restructuring? Do they have any particular benefits or downsides? Europe and the US have historically had quite different insolvency regimes, with most European insolvency regimes being recognised in other complex capital structures. The European regulatory framework has also improved to better solve for alternative capital to lend in jurisdictions where those jurisdictions previously presented challenges. For our clients, and the European private equity market, this increased access to liquidity has combined with the speed of execution to allow parties to transact quickly and efficiently and without the risk that their deal will be flexed on terms or economics. At a time of macro eco-political market uncertainty, dispensing with this risk has become increasingly attractive to borrowers. We have also seen an uptick in the number of public-to-private (P2P) financings in which publicly listed companies are acquired by private equity or corporate institutions and re- registered privately. This is partly due to the acquirer’s desire to maximize value from such assets which are harder to do when looking at a secondary or tertiary buy-out. This is a particularly complex process from a financing and M&A standpoint, being subject to significant regulatory overlay. It is imperative to have a strong working relationship between the financing and public M&A teams of all of those involved to navigate the regulatory framework and timing challenges. For private equity firms who raise money in dollars or euro and benefit from a favourable exchange rate against Sterling, the equity markets can be a particularly attractive place to get a good deal, especially at times where political uncertainty has led to depressed Sterling denominated share prices. In previous years, P2P transactions were typically large-cap transactions that relied on the large underwriting capability of the bulge bracket investment banks. Increasingly, however, the liquidity available to the direct lending market has made it possible to use credit funds to complete a P2P Of the recent significant matters that you have advised on, have there been any notable trends that you can tell us about? Willkie acts across a range of borrowing and lending transactionsbothonadomestic and cross-border basis. In the last 12 months we have seen borrowers more readily utilizing the direct lending markets to avoid bank-led syndication risk despite any increased price differential. The ability of credit funds to deploy sizeable financing cheques (enough to take down full underwrites required by borrowers) is seeing them increasingly selected to finance large and With theM&A sphere constantly fluctuating, lawyers must remain very mindful of the challenges ahead but remain fully prepared to navigate those challenges and to take advantage of the opportunities and trends ahead. Aymen Mahmoud does just this, as he explains below the trends he has noticed recently and the impact it has on companies. Completing The Deal By Aymen Mahmoud, Willkie Farr & Gallagher (UK) LLP 96 WWW.LAWYER-MONTHLY.COM | AUG 2019