October 21, 2014
Latham & Watkins has advised Punch A and Punch B Senior Noteholders’ Committee (the “Committee”) in relation to the conclusion of successful negotiations with the Punch group and its stakeholders to implement the long-awaited restructuring of its securitisation vehicles’ (Punch A and Punch B) £2.2 billion of debt (excluding the swap and liquidity liabilities). The transaction is one of the most legally and commercially complex restructurings in recent times.
Punch, one of the UK’s largest leased pub groups with a portfolio of around 4,000 pubs, is listed on the London Stock Exchange and is financed via two separate securitisation structures (Punch A and Punch B or the “Securitisations”) with noteholder debt of £1.4bn and £0.8bn respectively. The senior creditors organised in 2011 and Punch had been in discussions with its stakeholders to agree a consensual restructuring since late 2012. In February 2014, after three publicly failed attempts to push through a plan, Punch announced that it was no longer providing EBITDA support to the Securitisations and that one or both of Punch A or Punch B were therefore likely to breach covenants at the next testing date in April 2014.
The group’s failed restructuring proposals, amongst other things, delayed repayments to the Punch A notes and repaid certain Punch B junior notes from group funds. A number of bondholders (including the Committee) rejected the proposals on the basis that they didn’t reflect the legal rights and economic interests of the various stakeholders. After nearly two years, Punch has gained approval for its proposals to be accepted.
The Latham & Watkins London team was led by restructuring partners John Houghton and Mark Nicolaides and associate Helena Potts.