Magyar Telecom B.V. – The Restructuring of a High Yield Bond via an English Law Scheme of Arrangement | White & Case LLP International Law Firm, Global Law Practice
Magyar Telecom B.V. – The Restructuring of a High Yield Bond via an English Law Scheme of Arrangement

Magyar Telecom B.V. – The Restructuring of a High Yield Bond via an English Law Scheme of Arrangement

On 12 December 2013, our client, Magyar Telecom B.V. (the "Company"), a Dutch holding company of the Invitel group of companies (the "Group") and one of the leading telecommunication services providers in Hungary, completed the restructuring of its €345 million 9.5% Senior Secured Notes due 2016 (the "Notes").

There has been a considerable increase in New York law governed high yield debt issuance in Europe and the emerging markets over the past few years and currently the default rate remains at historic lows. If the default rate returns to, or exceeds, historic norms then debtors and bondholders will need to find a way to restructure those bonds that have not proved to be sustainable. This client alert briefly describes the background to the Magyar Telecom transaction, examines the commercial parameters of the restructuring, explains how the transaction was implemented and contemplates the significance of the transaction for future restructurings.

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