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  • 1.

    Discuss the major differences between high-yield debt securities and bank loans in your jurisdiction. What are some of the critical advantages and disadvantages?

  • 2.

    Are you seeing increased regulation regarding either high-yield debt securities or bank loans in your jurisdiction?

  • 3.

    Describe the current market activity and trends in your jurisdiction relating to high-yield debt securities financings.

  • 4.

    Identify the main participants in a high-yield debt financing in your jurisdiction and outline their roles and fees.

  • 5.

    Please describe any new trends as they relate to the covenant package, structure, regulatory review or other aspects of high-yield debt securities.

  • 6.

    How are high-yield debt securities issued in your jurisdiction? Are there particular precedents or models that companies and investors tend to review prior to issuing the securities?

  • 7.

    What is the typical maturity and call structure of a high-yield debt security? Are high-yield securities frequently issued with original issue discount? Describe any yield protection provisions typically included in the high-yield debt securities documentation.

  • 8.

    How are high-yield debt securities offerings launched, priced and closed? How are coupons determined? Do you typically see fixed or floating rates?

  • 9.

    Describe the main covenants restricting the operation of the debtor’s business in a typical high-yield debt securities transaction. Have you been seeing a convergence of covenants between the high-yield and bank markets?

  • 10.

    Are you seeing any tightening of covenants or are you seeing investor protections being eroded? Are terms of covenants often changed between the launch and pricing of an offering?

  • 11.

    Are there particular covenants that are looser or tighter, based on a particular industry sector?

  • 12.

    Do changes of control, asset sales or similar typically trigger any prepayment requirements?

  • 13.

    Do you see the inclusion of ‘double trigger’ change of control provisions tied to a ratings downgrade?

  • 14.

    Is there the concept of a ‘crossover’ covenant package in your jurisdiction for issuers who are on the verge of being investment grade? And if so, what are some of the key covenant differences?

  • 15.

    Describe the disclosure requirements applicable to high-yield debt securities financings. Is there a particular regulatory body that reviews or approves such disclosure requirements?

  • 16.

    Are there any limitations on the use of proceeds from an issuance of high-yield securities by an issuer?

  • 17.

    On what grounds, if any, could an investor be precluded from investing in high-yield securities?

  • 18.

    Are there any particular closing mechanics in your jurisdiction that an issuer of high-yield debt securities should be aware of?

  • 19.

    Outline how guarantees among companies in a group typically operate in a high-yield deal in your jurisdiction. Are there limitations on guarantees?

  • 20.

    What is the typical collateral package for high-yield debt securities in your jurisdiction?

  • 21.

    Are there any limitations on security that can be granted to secure high-yield securities in your jurisdiction? Are there any limitations on types of assets that can be pledged as collateral? Are there any limitations on which entities can provide security?

  • 22.

    Describe the typical collateral structure in your jurisdiction. For example, is it common to see crossing lien deals between high-yield debt securities and bank agreements?

  • 23.

    Who typically bears the costs of legal expenses related to security interests?

  • 24.

    How are security interests recorded? Is there a public register?

  • 25.

    How are security interests typically enforced in the high-yield context?

  • 26.

    How does high-yield debt rank in relation to other creditor interests?

  • 27.

    Describe how intercreditor arrangements entered into by companies in your jurisdiction typically regulate voting and control between holders of high-yield debt securities and bank lenders?

  • 28.

    May issuers set off interest payments on their securities against their tax liability? Are there any special considerations for the high-yield market?

  • 29.

    Is it common for issuers to obtain a tax ruling from the competent authority in your jurisdiction in connection with the issuance of high-yield bonds?

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Cuatrecasas is a leading Iberian law firm with its main offices in Portugal and Spain and international presence in 10 other countries.

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Madrid
Almagro 9
28010
Madrid
Spain
T: +34 91 524 7100
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