Distress Transactions In Spain "A Brief Investors Guide To Financing, Asset, Share And Debt Deals"

Garrigues is an international tax and legal services firm that provides business law advice on the main economic scenarios of the global marketplace. Since its creation in 1941, the firm has been noted for its international outlook and innovative nature. This guide has been produced by Garrigues? Investment Funds and Distressed M&A team, a cross-functional group within the firm, led by partners from the Corporate, M&A and Restructuring departments, which comprises the M&A, Real Estate, Banking and Finance, Capital Markets, Restructuring & Insolvency and Private Equity teams. The team is regularly involved in a variety of transactions, related to NPLs and REOs portfolios, real estate businesses, single assets or servicers, direct lending transactions, purchases and sales of businesses of insolvent companies, secondary deals, securitizations, trades and debt recovery analysis of large companies. Garrigues? Investment Funds and Distressed M&A team stands out among its competitors on the basis of the strong background of its members and the teamwork between all of them, which places Garrigues in a second-to-none position to globally advise our clients from the early stages of any distressed transaction until successful completion and, when advising the buy-side, until effective work-out of the debtor positions acquired. Clients from Garrigues? Investment Funds and Distressed M&A team recognize the value that the law firm adds to their businesses, understanding the economic, financial and legal needs, offering tailored solutions, managing complex processes and situations and achieving the highest standards of performance regardless the transaction?s type or size. The aim of this guide is to satisfy the curiosity of anyone interested in distress transactions in Spain and to share some of the experiences and lessons Garrigues learned in this field over the years.

ÍNDICE

I. INTRODUCTION

II. FINANCING FOR DISTRESSED COMPANIES

-I. Bank financing

-II. Alternative financing

-III. Direct lending

III. COMPANY ACQUISITIONS

-I. Acquiring a business outside an insolvency proceeding

-II. Claw back actions: in particular, structural modification operations carried out on distressed businesses before an insolvency order

-III. Acquisitions in insolvency proceedings

IV. ACQUISITION OF CORPORATE DEBT

-I. Purchase of distressed debt

-II. The Spanish Insolvency Act and the acquisition of debt

V. LOAN PORTFOLIO ACQUISITIONS (NPLs)

-I. Main legal issues to consider when acquiring loan portfolios

-II. Management of the loan portfolio that has been sold: credit servicing

-III. Personal data protection regulations

-IV. Funded participation agreements

VI. PROPERTY PORTFOLIO ACQUISITIONS (REOs)

VII. ACQUISITION FINANCING AND SECURITIZATION

-I. The Facilities

-II. The Guarantees: certain Spanish law restrictions

-III. The security package

-IV. Financing through securitization

VIII. Alternative structures for divesting distressed assets

-I. Share deals as an alternative structure for NPLs and REOs portfolio sales

-II. Post-acquisition restructuring of portfolio acquisitions

-III. Joint venture model as an alternative to complete disposal of distressed assets

-IV. Concluding notes

IX BIBLIOGRAPHY