Partners Didier Bruere-Dawson and Pierre-Alain Bouhenic discuss new fundings (players, sources, methodologies, securities, etc.) in domestic and cross border restructuring in a recent interview with French newspaper Le Figaro. The article recgnises Brown Rudnick's hallmarks and ingenuity in an ever changing environment. The article below goes on to call Brown Rudnick the firm able to handle impossible missions, taking on the challenging modes of financing.

With a reputation for being the “law firm of the impossible”, Brown Rudnick’s agility and ingenuity make it an invaluable partner. This is all the more true when faced with the evolution of financing arrangements. Focus with Pierre-Alain Bouhenic and Didier Bruere-Dawson, partners.

What is stimulating the emergence of alternative financing?

P.-A. B.: The increasing scarcity of bank financing both for companies and investors is linked to the financial crisis and changes in banking regulations. Increasingly backed by non-banking operators and most often structured as bonds, they meet the needs of operating expenses such as acquisitions.

What is the nature of these instruments?

D. B.-D: On the LBO market we have seen strong growth in Unitranche financing; the lender takes on both the senior and mezzanine debt, becoming de facto the only lender of the operation. Offered by operators with high investment capacity, it is an innovative alternative.

P.-A. B.: Added to which we also see an increase in more flexible solutions such as Euro PP, US, PP, IBO, etc. Offered by private operators, these instruments meet the needs of medium sized companies that, today, find it difficult to obtain bank financing for their investments or WCR.

Does this affect the lender’s position in under-performing companies?

D. B.-D: Certainly, a lender holding complex products does not show the same reticence towards conversion of their debt into capital. In the context of discussions on preventive measures or collective insolvency proceedings they have very different attitudes to standard banking partners which leads to the consideration of restructuring solutions which alter established practices.

Does this affect the treatment of companies in difficulty?

P.-A. B.: Absolutely, the complexity of these new financing methods leads to a re-thinking of legal solutions and engineering of restructurings including in the context of preventive procedures. It requires ingenuity to deploy imaginative solutions. Hence our cross-practice skill set in finance, corporate law, and restructuring among others allows us to make optimal assessments of renegotiation positions from the investor or debtor side. And that is the added value of our firm that has historically specialised in restructuring versus creditors.

D. B.-D: Our cross-border and cross-practice approach is an asset in light of the increasing number of externalised securities in order to be able to provide proactive solutions prior to restructuring.

 

Read the full Le Figaro article here.

This article was first published in Le Figaro October 17, 2019, and is reproduced by kind permission of Le Figaro. 

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