Milbank Represents Creditors in US$1.2 Billion Debt Refinancing for Tenedora Nemak, S.A. de C.V.
WASHINGTON, DC, November 20, 2009 – Mexican automotive parts manufacturer Tenedora Nemak, S.A. de C.V. (Nemak) has refinanced approximately US$1.2 billion in existing debt in a transaction involving its creditors around the world. The international law firm Milbank, Tweed, Hadley & McCloy LLP represented BBVA Securities, Inc., Citigroup Global Markets, Inc., HSBC Securities (USA) Inc., Santander Investment Securities Inc. and Standard Chartered Bank in their role as the Coordinators for the refinancing.
Nemak, headquartered in Monterrey, Mexico, is the largest aluminum automotive component foundry in the world, manufacturing and distributing aluminum cylinder heads, engine blocks, and transmission parts used by General Motors, Ford, Chrysler, BMW, Fiat and other car makers to build internal combustion engines. Nemak, which is a subsidiary of Grupo Alfa, has 28 manufacturing facilities located in 13 different countries in Asia, Europe and North and South America, and more than 10,000 employees worldwide.
The closing of the transaction represents the culmination of ten months of negotiations, involving over 30 financial institutions and local counsel in eight different jurisdictions, reflecting Nemak’s worldwide operations. The refinancing agreement, which was signed on September 30 and fully consummated on October 30, 2009, involved the amendment, restatement and refinancing of Nemak’s US$730 million syndicated term loan facility executed in 2007, the bilateral loans of Nemak and its subsidiaries and various derivative contracts, letters of credit, factoring facilities and working capital lines. In addition, the guarantees, security and other credit support for the facilities were similarly amended. Nemak also completed a contemporaneous refinancing for its approximately Mexican Pesos 3.5 billion of bonds in the Mexican markets. Milbank was responsible for the drafting and negotiation of all of the key refinancing documents and coordinating with the various local counsels.
Glenn S. Gerstell, the Milbank partner who led the firm’s deal team, noted, “Cross-border refinancings always present complex legal issues, but given Nemak’s operating subsidiaries around the world, we had an extra level of complication due to the sheer number of jurisdictions and financial institutions involved. Nemak and the Coordinating Banks had a special challenge in persuading all of the creditors around the globe to participate in the refinancing, since of course there is no one legal proceeding to compel the participation of all parties. We believed that Milbank was well-positioned to handle the challenges presented by this deal because of our extensive experience representing financial institutions in multi-jurisdictional financing transactions, particularly in Mexico. It is a testament to the hard work and dedication of many individuals on all sides of the transaction that it was completed in such an efficient and effective manner.”Mr. Gerstell is the managing partner of the Washington, DC office and has been active in cross-border refinancings and restructurings in Latin America, Asia and the US. In addition to Mr. Gerstell, the Milbank team representing the lenders included partner Thomas Igenhoven from Milbank’s Frankfurt office, associates Gavin W. McKeon and Frederick S. Cristman from Milbank’s Washington, DC office, Christie Hyosung Tang from Milbank’s New York office and Simone Jorden, Stephan Dulitz and Anh-Duc Cordalis from Milbank’s Frankfurt office.
Milbank acted as New York and German counsel to the Coordinators in the transaction.
The Coordinators were also advised by Ritch Mueller S.C. as to Mexican law and Bennett Jones LLP as to Canadian law.Nemak was advised by Weil, Gotshal & Manges LLP as to New York, German and Hungarian law, Davies Ward Phillips & Vineberg LLP as to Ontario law, Stewart McKelvey Sterling Scales as to Nova Scotia law, Holland Van Gijzen Advocaten en Notarissen LLP as to Dutch law and Alejandro Paredes as to Mexican law.
Nemak and the Coordinators were jointly advised by Alae Abogados as to Spanish law, Waller Lansden Dortch & Davis, LLC as to Tennessee law, Wolf Theiss as to Austrian law and Pinheiro Neto Advogados as to Brazilian law. Bernstein, Shur, Sawyer and Nelson acted as special counsel to Citibank as global collateral agent.
About Milbank
Milbank, Tweed, Hadley & McCloy LLP is a preeminent global law firm that for more than 140 years has provided innovative legal solutions in many of the world’s largest, most complex, “first-ever” corporate transactions and litigation. Our transactional expertise includes capital markets, corporate finance, project finance, acquisition finance, and other major fields of law practice. Milbank litigation teams resolve disputes involving mergers and acquisitions, proxy battles, financings and securities offerings, intellectual property, white collar crime, and corporate restructurings, among others. Our clients range from prominent multinational financial, industrial and commercial enterprises to governments, institutions and individuals. The Firm is headquartered in New York with offices in Beijing, Frankfurt, Hong Kong, London, Los Angeles, Munich, Singapore, Tokyo, and Washington, DC.