Starting news article english 11 December 2012

Clifford Chance advises Ciech S.A. on its innovative long-term refinancing

International law firm Clifford Chance advised Ciech S.A., a leading European soda ash producer, on the overhaul of its existing capital structure using high yield as its primary source of liquidity. Ciech is Poland's second debut issuer in the high yield market this year. The high yield issuance is particularly noteworthy given that it demonstrates positive market sentiment towards Central Europe in spite of challenging Eurozone trends. Above all, the refinancing comprised a "first of a kind" simultaneous implementation of a mix of €245 million high yield Rule 144A/Reg S notes, PLN 320 million domestic bonds and a PLN 100 million super senior revolving credit facility to provide natural hedging for its wider European business. At the heart of the transaction structure was an intercreditor arrangement providing for a mechanic enabling domestic bondholders (who do not act through a trustee) to share the same security pool as is available to the high yield and revolving facilities creditors.

The high yield issuance was arranged by Credit Suisse and Barclays. Deutsche Bank is the trustee. The domestic bonds were arranged by Banco Espirito Santo de Investimento. The super senior revolving credit facility was provided by a syndicate of existing local lenders. PKO BP acts as the security agent.

Clifford Chance advised Ciech on all aspects of the refinancing, covering the full spectrum of legal debt advisory services comprising New York, English, Polish, German and Romanian law advice (as well as specialised corporate, environmental, tax and ERISA advice). Lead partners, Fabio Diminich, Andrzej Stosio and Loren Richards said: "We are delighted to have continued our long-standing co-operation with Ciech, to help them be one of the European corporates that is pioneering the re-engineering of European corporate capital structures to embrace the stable liquidity of high yield as an integral part thereof". They were also quick to add that "particularly in the context of European high-yield transactions, the combination of Clifford Chance's depth in its European network,  its established team of high yield lawyers, plus its proven ability to join up the multiple jurisdictions and products to create viable debt solutions, ensures our business partners get the full value-added of this being provided by a single firm. For successful and efficient deal execution, not least on European high yield transactions, this is paramount".

The deal team was led by Fabio Diminich (Capital Markets, London), Andrzej Stosio (Banking & Finance, Warsaw) and Loren Richards (Banking & Capital Markets, Frankfurt). They were principally supported by Henry Peacock and Annie Guerard-Langlois (Capital Markets, London), Miłosz Gołąb, Grzegorz Abram, Iwo Klijewicz, Jakub Wieczorek, Natalia Sobczak and Mateusz Chruściak (Banking & Finance, Warsaw), Sebastian Maerker, Tobias Schulten, Christian Wöckener-Erten, Rafael Lamlé, Michael Brill and Sven Kurzawe (Banking & Capital Markets, Frankfurt) and Radu Ropota (Banking & Finance, Bucharest).