Clifford Chance

Clifford Chance advise the AA on new £350m PIK Toggle Note issuance

International law firm Clifford Chance advised the AA on the issuance of £350m 9½% / 10¼% PIK toggle notes due 2019 by AA PIK Co Limited guaranteed on a senior basis by AA Limited.

The Notes are unrated and structurally subordinated to the whole business securitisation and high yield issuance (together the WBS) of the AA that completed in July 2013 and on which Clifford Chance also advised the AA. The first 18 months of PIK coupons will be serviced by a cash interest account pre-funded on closing. Thereafter payment of PIK coupons in cash will be dependent on receipt of dividend proceeds with an option to PIK.

This important transaction for the AA and its sponsors Charterhouse, CVC and Permira constitutes the largest ever sterling PIK toggle note issuance and successfully closed to strong demand. The PIK toggle notes priced at the same level as the Class B Notes issued pursuant to the WBS rated BB by S&P.

The Clifford Chance team involved in both the WBS and the PIK Toggle transactions was led by capital markets partner Steve Curtis working with partners Roderick McGillivray (banking), David Pearson (corporate) and Dan Neidle (tax). Steve Curtis was assisted by Cameron Saylor, Kathryn James and Matthew Ball, Roderick McGillivray was assisted by Matthew Dunn and Dan Neidle was assisted by Nicola Hemsley.