Investing in Distressed Debt in Europe:

The TMA Handbook for Practitioners

Edited by Ignacio Buil Aldana

Publication date:

01 November 2016

Publisher

Globe Law and Business

ISBN-13: 9781787420472

The European distressed debt market has grown exponentially during the last few years, experiencing very significant development. Many investors have entered that market with the intention of profiting from the opportunities that this market is offering them. However, navigating the waters of the European distressed debt market has not always been easy, because this market is far from homogeneous and legal fragmentation is the norm. This co-publication with TMA Europe provides an overview of the European distressed debt market, covering debt trading, non-performing loans, direct lending, restructuring and workouts. It analyses these topics and others from a pan-European point of view, and is intended as a practical guide for anyone seeking a better understanding of the commercial and legal complexities involved in a highly fragmented market where different jurisdictions, legislative frameworks and market practices apply. Ignacio Buil Aldana, a partner in the finance and restructuring team at the London office of Spanish law firm Cuatrecasas, Gonçalves Pereira, has acted as consulting editor for the publication, which also features contributions from other leading experts in the field. Whether you are a lawyer in private practice or in industry, a financial advisor or an investor, this title aims to give you comprehensive insight into all the significant aspects of the European distressed debt market.

Foreword 7 Lukas Fecker TMA Europe President Preface 9 Ignacio Buil Aldana Cuatrecasas, Gonçalves Pereira Part I: Introduction Investing in distressed debt in Europe: an overview 13 Tom Cox Damian Malone Mark Sinjakli AlixPartners Part II: Acquisition of distressed debt Credit agreement and indenture analysis from a European perspective 33 Jacqueline Ingram Cadwalader, Wickersham & Taft LLP Anatomy of an LMA distressed trade transaction and transfer mechanisms under English law 43 Elizabeth Bilbao Mandel, Katz & Brosnan LLP Overview of distressed trading in selected jurisdictions 59 France Jérémie Bismuth Olivia Locatelli Dimitrios Logizidis Gide Loyrette Nouel Germany Sacha Lürken Wolfgang Nardi Oded Schein Kirkland & Ellis International LLP Italy Gregorio Consoli Federica Scialpi Chiomenti Studio Legale Spain Beatriz Causapé Cuatrecasas, Gonçalves Pereira Part III: The European nonperforming loans (NLP) market ‘Bad banks’ and their role in the financial sector deleveraging process in Europe 81 Fernando Mínguez Cuatrecasas, Gonçalves Pereira Anatomy of a non- performing loan portfolio sale 93 Paul Dunbar Vinson & Elkins LLP Part IV: Direct lending The direct lending landscape in Europe 109 Nerea Pérez de Guzmán FTI Consulting Trends in direct lending 119 Andrew Perkins Sarah Ward Macfarlanes LLP Legal structuring of direct lending deals in selected European jurisdictions France 133 Jérémie Bismuth Marie Dubarry de Lassalle Olivia Locatelli Caroline Texier Gide Loyrette Nouel Germany 141 Sacha Lürken Wolfgang Nardi Oded Schein Kirkland & Ellis International LLP Italy 149 Giorgio Cappelli Andrea Martino Giovanna Randazzo Chiomenti Studio Legale Spain 157 Íñigo de Luisa Íñigo Rubio Cuatrecasas, Gonçalves Pereira Part V: Restructuring and workouts Recent trends in European cross-border restructurings 167 Arturo Gayoso Deloitte Financial Advisory Schemes of arrangements: theory and practice 175 Graham Lane Iben Madsen Willkie Farr & Gallagher LLP Developments in the European legal framework for restructuring France 199 Jérémie Bismuth Marie Dubarry de Lassalle Olivia Locatelli Caroline Texier Gide Loyrette Nouel Germany 215 Sacha Lürken Kirkland & Ellis International LLP Italy 237 Giulia Battaglia Antonio Tavella Chiomenti Studio Legale Spain 249 Cristóbal Cotta Andrea Perelló Fedra Valencia Cuatrecasas, Gonçalves Pereira Restructuring high-yield bonds in Europe 261 Paul Durban Grégoire Hansen Brown Rudnick LLP The recast EU Insolvency Regulation and its impact on distressed investing 279 James Bell Douglas Hawthorn Jeremy Walsh Travers Smith LLP Part VI: Taxation Structuring the acquisition and disposal of distressed debt 295 Rebeca Rodríguez Cuatrecasas, Gonçalves Pereira Luke Vassay Milbank, Tweed, Hadley & McCloy LLP About the authors 317

Investing in Distressed Debt in Europe makes a genuine contribution to the literature by combining the practical knowledge of its expert contributors with serious legal analysis in an area which is infrequently covered in other work. Crucially, in doing so, it avoids simply setting the law out or recounting war stories from the market. Instead, it has been carefully structured and provides a rigorous analysis of the issues which it covers, so that the reader is likely to be able to navigate to the appropriate point with ease. This means that, whilst the book can certainly be read cover to cover, it is also invaluable for those with specific concerns and time constraints.