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London Office Completes Hybrid Securities Offering and High Yield Offering
Practices
In spite of difficult market conditions in Europe, two issuers represented by the London office were able to launch securities offerings involving two very different classes of credit instruments.
Swiss Reinsurance Company Ltd completed an offering of CHF 320 million of perpetual subordinated notes. The notes contain a novel stock settlement feature pursuant to which holders will receive listed shares of Swiss Re Ltd, the parent company of the Swiss Re Group, in settlement for the notes at the option of the issuer. The offering comes in the context of regulatory changes in the banking and insurance sectors and significant debate concerning the role of conditional capital and other hybrid instruments in addressing liquidity and capital needs of financial institutions. Swiss financial institutions have been leading the hybrid market, and the Swiss Re offering has attracted significant commentary given its novel features. The notes were sold in the Swiss market only. The Paul, Weiss team advising Swiss Re was led by Mark S. Bergman.
At the same time, the office advised Cable & Wireless Communications Plc (CWC), a telecommunications company with operations in 37 countries, on its offering of $400 million aggregate principal amount of 8.75% senior secured notes due 2020. Due to the softness of the Euro high yield market, the offering was marketed in the United States. Slaughter and May advised the issuer on English law aspects of the offering. The Paul, Weiss team advising CWC was led by Mark S. Bergman, with tax assistance provided by partner David Mayo.