The high yield debt market provides a deep source of liquidity in a credit-constrained environment. The recent lack of liquidity in the bank market combined with robust liquidity in the high yield debt market has led to the increased use of high yield debt as a source of capital to finance acquisitions and restructure existing debt. Although financial sponsors often incorporated high yield debt into LBO debt structures in the past, today high yield debt is increasingly being used to finance both the senior secured tranche as well as the unsecured or subordinated tranches of the debt capital structure. As a result, high yield volume in 2009 exceeded the record level set in 2006.

Ropes & Gray helps financial sponsors and issuers access the high yield debt market, both through helping issuers to complete offerings of high yield debt securities as well as helping sponsors and issuers to understand and navigate complex high yield debt covenants. Ropes & Gray brings to bear its deep expertise in both capital markets securities offerings and debt finance to enable its clients to take advantage of the opportunities presented in the high yield debt market today. Out of the five largest high yield debt offerings completed worldwide in 2009, Ropes & Gray represented the issuers in two of them.

Recent High Yield Debt Offerings

Liberty Global/Unitymedia. Represented Liberty Global in its issuance of an aggregate of €2.66 billion of a combination of senior secured and senior unsecured notes in connection with its recent acquisition of Unitymedia, Germany's second-largest communications services provider. This was the largest secured bond deal in European high yield history. It was also the largest high yield deal in the cable space and the second largest high yield deal ever completed in Europe.

Clear Channel Outdoor. Represented Clear Channel Outdoor and Clear Channel Worldwide in a $2.5 billion offering of senior unsecured notes in the largest unsecured bond offering and fourth largest high yield bond offering completed globally in 2009.

Clear Channel Communications. Represented Bain Capital and Thomas H. Lee Partners in connection with the issuance of $2.31 billion of senior unsecured cash-pay notes and senior unsecured PIK toggle notes to finance the going-private acquisition of Clear Channel Communications, Inc., the largest radio broadcasting company in the U.S. and a worldwide leader in outdoor advertising.

Quintiles Transnational. Represented Bain Capital in a $525 million high yield debt  offering of Quintiles Transnational to fund a dividend to sponsors and for ongoing general purposes.

Easton Bell-Riddell. Represented Fenway Partners and its portfolio company, Easton Bell Riddell, in the refinancing of the company's senior secured credit facilities and high yield bonds with $350 million of new senior secured bonds and an asset-based revolving facility.

Norcraft Companies, L.P. Represented Apax Partners and its portfolio company, Norcraft Companies, L.P., in a $180 million secured bond offering to refinance existing debt.

Axcan Pharma. Represented TPG Capital in connection with the issuance of $228 million of senior secured notes and $235 million of senior unsecured notes to finance the going-private acquisition of Axcan Pharma, a leading multinational pharmaceutical company. 

Avaya. Represented Silver Lake Partners and TPG Capital in connection with the issuance of approximately $1.45 billion of senior unsecured cash-pay notes and senior unsecured PIK toggle notes to finance the going-private acquisition of Avaya, the leading multinational enterprise telephony company.

Outback Steakhouse. Represented Bain Capital and Catterton Partners in connection with the issuance of $550 million of senior notes to finance the going-private acquisition of OSI Restaurant Partners, owner of the Outback Steakhouse, Carrabba’s, Bonefish Grill, and other prominent restaurant chains.

HUB International. Represented Apax Partners and Morgan Stanley Principal Investments in connection with the issuance of approximately $700 million of senior notes and senior subordinated notes to finance the acquisition of HUB International, a leading insurance broker. 

United Surgical Partners International. Represented Welsh, Carson, Anderson & Stowe in connection with the issuance of $240 million in senior subordinated cash-pay notes and $200 million in senior subordinated PIK toggle notes to finance the acquisition of United Surgical Partners International, a leading operator of outpatient surgery centers and hospitals.

The Weather Channel. Advised a consortium comprising Bain Capital, The Blackstone Group and a leading media and entertainment company in connection with the issuance of $610 million of senior subordinated notes to finance the acquisition of The Weather Channel Companies, a preeminent multi-platform media group of companies focused on weather information, including The Weather Channel television, broadcasting networks, and Weather.com. 

For more information on this area of practice, please contact:

Boston
Byung Choi 

London
Jonathan Bloom

New York
Jay Kim  

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