Hogan Lovells advises HNA Group on its circa €1.5bn debt and equity financing related to the acquisition of Swissport Group
15 December 2015
Hogan Lovells has advised HNA Group, a Fortune 500 company and the owner of China's fourth largest airline, on the first phase of a complex circa €1.5bn debt finance raising in conjunction with HNA Group's CHF2.7 billion (enterprise value) acquisition of the Swissport Group, the world’s largest ground and cargo handling company, from PAI Partners.
The New York law-governed transaction involved extensive cross-border elements and multiple financing components that include a €660 million Term Loan B, a €400 million senior secured high yield bond, a €290 million senior unsecured high yield bond and an up to CHF150 million revolving credit facility. It is expected that the €660 million Term Loan B element of the deal will complete in the New Year.
This hybrid financing was arranged by Barclays, J.P. Morgan and UBS. Benedetto, Gartland & Co., Inc. and Rothschild, Inc. acted as financial advisors to HNA on the financing
Upon closing of the acquisition, the proceeds of the transaction will be utilised to re-finance certain existing debt obligations of the Swissport Group. In addition, subsidiaries of the Swissport Group from 14 different jurisdictions are expected to accede as guarantors of all the newly issued debt, as well as to provide security in respect of the financing components that are intended to be secured. The bonds were issued via a newly incorporated Luxembourg entity and will be listed on Luxembourg’s Euro-MTF market.
In addition to partners leading the transaction from London, the transaction also featured involvement of partners from Hogan Lovells' New York, Washington D.C., Luxembourg, Paris, Amsterdam, Frankfurt, Madrid, Mexico City and Sao Paulo offices.
The Hogan Lovells team was led by partners Sylvain Dhennin, International Debt Capital Markets, London, Alexander Premont, Banking, Paris/London and Gordon Wilson, Banking, Washington, D.C.
Commenting on the transaction, Sylvain Dhennin, said: "Large financings of this type have been particularly hard to complete in the second half of 2015. This deal was closed in especially tough market conditions with the expectation of interest rate rises in 2016 and the global effects of the economic slowdown in China."
Alexander Premont added: "This transaction showcases Hogan Lovells' ability and global reach to handle hybrid TLB financings and European high yield bond offerings and in the context of large acquisitions."