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Legal Resources

Covenant Tearsheet
22 October 2020 7:25 pm
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Adevinta’s €1.06B 2025/2027 Senior Secured Notes

Norwegian online classifieds company Adevinta has launched the issuance of €1.06 billion of senior secured notes due 2025, 2027 to fund a portion of the cash consideration for the acquisition of eBay Classifieds Group and refinance existing debt.

Investors meetings will be taking place until Thursday, October 22, with pricing thereafter. A capital structure prepared by Reorg can be found at the end of this tearsheet.

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Covenant Tearsheet
11 December 2020 7:16 am
Sofima’s €1.28B 2027 Senior Secured Notes

Italian machinery maker Industria Macchine Automatiche SpA, or IMA, has originally launched €1.28 billion of seven-year senior secured fixed and floating rate notes due 2027 to finance its buyout by BC Partners and So.Fi.M.A. Società Finanziaria Macchine Automatiche SpA. The fixed rate tranche has been upsized by €30 million to €830 million, sources told Reorg.

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Covenant Tearsheet
18 November 2020 7:19 pm
Infopro Digital’s €685M 2025 Senior Secured Notes

European media and information services provider Infopro Digital has launched a new €685 million five-year offering of senior secured fixed and floating rate notes to refinance existing bonds and other debt.

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Covenant Tearsheet
15 October 2020 7:28 pm
CANPACK’s $1.1B-Equiv 2025/2027 Senior Notes

Global manufacturer of can, glass containers and metal closures for the beverage industry, CANPACK, has launched an offering of $1.1 billion-equivalent dollar and euro denominated senior notes through co-issuers Canpack S.A. and Canpack U.S. The issuance will have a euro tranche of seven years to feature non-call three protection and a dollar tranche of five years with non-call two protection.

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Covenant Tearsheet
24 September 2020 7:33 pm
iQera’s €200M 2024 Senior Secured Notes

French debt servicer and purchaser iQera has launched €200 million of fixed rate senior secured notes due 2024, the proceeds will be used to repay drawings on the group’s RCF, refinance €75 million of its floating rate notes, fund cash for general corporate purposes and pay transaction-related costs. The RegS/144A notes will feature non-call protection for one year.

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Covenant Tearsheet
14 September 2020 7:34 pm
Maxeda’s €400M 2026 Senior Secured Notes

Dutch DIY retailer Maxeda has launched a six-year non-call two €400 million of senior secured notes. Proceeds, together with €52 million of cash on hand, will be used to repay in full €435 million of the group’s existing 6⅛% senior secured notes due 2022 (the “2022s”). The remaining €40 million of existing notes are held by the group, which will be cancelled prior to the completion of this offering.

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Covenant Tearsheet
10 September 2020 7:33 pm
Encore’s €300M 2025 Senior Secured Notes

Encore Capital Group, the holding company of U.K. debt collector Cabot, has launched €300 million of senior secured notes due 2025. The proceeds from the bond along with drawings on senior facilities will be used to repay approximately $203.3M of drawn amounts under the group’s senior facilities, repay $40M of drawn amounts under the Encore senior facilities (which is expected to be terminated soon after the issue date), and prepay $103.7 million of Encore private placement notes.

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Covenant Tearsheet
29 July 2020 4:04 pm
DoValue’s €265M 2025 Senior Secured Notes

Italian loan and real estate service company doValue S.p.A (the Issuer) has launched a new five-year €265 million senior secured bond to prepay a bridge facility used in the acquisition of 80% of the share capital of FPS Loans and Credits Claim Management Company S.A (FPS) by doValue Greece Holding S.M.S.A. (FPS HoldCo). It is contemplated that FPS HoldCo will merge into FPS (the Reverse Merger).

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Covenant Tearsheet
21 July 2020 7:35 pm
Stonegate’s £950M, €300M 2025 Senior Secured Notes

U.K. pub operator Stonegate has launched a five-year £950 million fixed rate senior secured bond along with a five-year €300 million floating rate senior secured bond. Proceeds will be used to repay £950 million of outstanding borrowings under the existing bridge facilities as well as £275 million of outstanding borrowings under the senior term facilities.

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Covenant Tearsheet
8 July 2020 7:37 pm
Bite’s €650M 2026 Senior Secured Notes

On Monday, Bite, a telecommunications group headquartered in Latvia with operations across the Baltic markets, launched a 5.5-year two-tranche €620 million senior secured bond deal. Proceeds will be used to repay in full the company’s credit facilities and to fund a reduction of its share capital.

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Covenant Tearsheet
1 July 2020 7:31 pm
Engineering Group’s €605M 2026 SSNs

Engineering Group, an Italian provider of IT services, software development and marketing platforms, has launched a €605 million offering of two year non-call senior secured notes due 2026 (the “Notes”) issued by Centurion Bidco S.p.A. (the “Issuer”).

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Covenant Tearsheet
30 June 2020 7:38 pm
Renk’s €300M 2025 Senior Secured Notes

German drive technologies manufacturer Renk has launched a €300 million five-year senior secured bond with a two-year non-call period and expected ratings of B1/B by Moody’s and S&P.

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Covenant Tearsheet
25 June 2020 7:39 pm
Thyssenkrupp Elevator’s €3B-Equiv Senior Secured Notes

Thyssenkrupp Elevator is launching a series of notes to support the acquisition of the group by Advent and Cinven. The issuance will consist of €750 million seven-year non-call three senior secured notes, €1 billion seven-year non-call one senior secured FRNs, €1.25 billion equivalent-in-dollars seven-year non-call three senior secured notes, €650 million eight-year non-call three senior notes and €400 million equivalent-in-dollars eight-year non-call three-year senior notes. A global roadshow will be taking place until Wednesday, July 1, with pricing thereafter.

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Covenant Tearsheet
22 June 2020 7:41 pm
ams AG’s €1B-Equiv 2025 Senior Notes

Today, June 22, Austrian sensor solutions group ams AG launched a new five-year €1 billion-equivalent senior unsecured bond, with proceeds to be used to partially fund the acquisition of Osram and to refinance debt.

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Covenant Tearsheet
22 June 2020 7:40 pm
Profine’s €330M 2025 Senior Secured Notes

Today, June 22, German window and door profile systems producer Profine launched a five-year €330 million non-call two senior secured bond, with proceeds to be used to refinance existing credit facilities.

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Covenant Tearsheet
15 May 2020 7:42 pm
Sappi’s €250M 2025 Senior Notes

South African pulp and paper group Sappi is offering €250 million in five-year senior notes to strengthen its balance sheet and provide liquidity headroom.

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Covenant Tearsheet
11 May 2020 7:43 pm
Rubis’ €410M 2025 Senior Secured Notes

French storage company Rubis is marketing €410 million of five-year senior secured notes to repay debt incurred in the acquisition of a stake in the business and to refinance its existing debt.

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Covenant Tearsheet
24 February 2020 7:16 pm
Fugro’s €500M 2025 Senior Secured Notes

Dutch geo-data group Fugro is marketing a 5NC2 €500 million senior secured bond to refinance debt. The roadshow started in London on Monday, Feb. 24, and continued today before moving to Paris and Amsterdam tomorrow and Frankfurt on Thursday, Feb. 27.

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Covenant Tip 12
12 December 2019 6:52 pm Sabrina Fox
The Reports Covenant

The Reports Covenant provides critical information to investors about an issuer’s ongoing financial performance. In this ELFA Covenant Tip we explain common reporting requirements and what happens if the covenant is breached.

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Covenant Tip 11
12 December 2019 6:48 pm Sabrina Fox
Portability and Round-Tripping Risk

Portability has become a standard feature in European high yield deals, allowing the company to be sold without a 101% put offer requirement if a leverage ratio can be met. In this ELFA Covenant Tip, we explain how the use of net leverage ratios present “round-tripping” risks, what’s been done to address this, and how to find the risk.

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Covenant Tip 10
12 December 2019 6:44 pm Sabrina Fox
Payments for Consent

The Payments for Consent covenant provides important protections to bondholders, but it’s disappearing from covenant protections. In this ELFA Covenant Tip, we explain the value of this provision, the risks presented when it’s missing, and how to find it. The Payments for Consent covenant precludes the issuer to paying any

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Covenant Tip 9
11 December 2019 6:40 pm Sabrina Fox
Restricted Payments Capacity

Determining Restricted Payments capacity isn’t as easy as adding up baskets – a short provision (usually) found between the definition of “Restricted Payment” and the build-up basket has a significant impact on total capacity. In this ELFA Covenant Tip, we explain how it works. Capacity to make Restricted Payments is derived from the build-up basket (usually

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Covenant Tip 8
26 June 2019 9:39 am Sabrina Fox
SALE AND LEASEBACKS, DEBT INCURRENCE, ASSET SALES

Did you know that Sale and Leaseback covenants used to be fairly common? In general, it required that sale and leaseback transactions complied with the Asset Sale and Debt covenants. Now Sale and Leasebacks are often carved out from both covenants altogether. Sale and leasebacks are analogous to providing a secured claim over assets, as

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Covenant Tip 7
24 June 2019 11:39 am Sabrina Fox
COVENANT CALCULATIONS, DEBT INCURRENCE, RESTRICTED PAYMENTS

Most covenant ratio tests allow the issuer to ignore debt incurred under permitted debt baskets on the calculation date. This allows issuers to, on the same day, raise maximum debt under the ratio before using the baskets. This is logical as the same result could be achieved by incurring ratio debt one day and permitted debt the very next day.

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Covenant Tip 6
21 June 2019 3:48 pm Sabrina Fox
ELFA Covenant Tip #6

Some covenants contain a provision requiring investors to keep confidential any information the issuer delivers under the reports covenant. In this ELFA Covenant Tip, we explain how this provision creates an even more stringent requirement than what is usually present in a private loan, and raises the risk that investors become restricted on the name. A typical reporting covenant requires that the issuer must furnish reports required

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Covenant Tip 5
21 June 2019 2:20 pm Sabrina Fox
ELFA Covenant Tip #5

Some covenants will allow issuers to access potentially significant dividend capacity even while the issuer is in default. In this ELFA Covenant Tip, we explore the decline of the no default blocker in the Restricted Payments covenant. This feature is one of a suite of provisions included in recent deals that preserve flexibility under the covenants even when the issuer might be in distress – in this case, owners could access dividend capacity even after the issuer misses a coupon payment.

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Covenant Tip 4
20 June 2019 3:44 pm Sabrina Fox
ELFA Covenant Tip #4

Some covenants will allow a bond issuer to calculate capacity under the covenants as of the date of entry into a definitive agreement relating to a transaction, and do not require capacity to be retested at closing of the transaction. In this ELFA Covenant Tip, we explain how “Limited Condition Acquisition” flexibility works When the transaction could be credit positive (e.g., if the issuer is buying a valuable asset), this “Limited Condition Acquisition” flexibility could be seen as favourable to both the issuer and bond investors as it reduces transaction risk.

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Covenant Tip 3
20 June 2019 3:30 pm Sabrina Fox
ELFA Covenant Tip #3

Some covenants will allow issuers to access potentially significant dividend capacity even while the issuer is in default. In this ELFA Covenant Tip, we explore the decline of the no default blocker in the Restricted Payments covenant. This feature is one of a suite of provisions included in recent deals that preserve flexibility under the covenants even when the issuer might be in distress – in this case, owners could access dividend capacity even after the issuer misses a coupon payment.

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Covenant Tip 2
19 June 2019 5:50 pm Sabrina Fox
ELFA Covenant Tip #2

Some covenants provide borrowers with the flexibility to designate undrawn credit facility commitments as having been “incurred” under an applicable ratio or grower basket, rather than calculating capacity for that debt or lien at the time of draw down. In this ELFA Covenant Tip, we explain the "Designated Commitments" concept, the risks it presents, and where to find it. The provision allows the issuer to opportunistically calculate debt capacity, and then obtain or increase commitments, when it is favourable to the company (such as, for

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Covenant Tip 1
19 June 2019 5:22 pm Sabrina Fox
ELFA Covenant Tip #1

The secured debt leverage ratio typically does not impose an aggregate cap on secured debt capacity in a high yield bond covenant package. In this ELFA Covenant Tip, we explain how to measure an issuer's potential secured debt capacity. In addition to the secured debt leverage ratio, a high yield issuer is often able to secure several other material debt baskets - which means that total secured debt capacity is likely materially higher than where the secured debt leverage ratio is set.

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