The depth and liquidity of the investor base in the US markets has become increasing attractive to European leveraged finance borrowers in the last few years. The lower pricing of US dollar-leveraged loans available in the US compared to that of leveraged loans in the European market has also attracted European borrowers to the US, even with the cost of currency hedging. It's no wonder the market has seen an increase in cross-border finance.
Both lenders and borrowers should consider a number of issues in structuring “Yankee Loans”, which are US institutional term loans provided to European borrower groups. These considerations are driven primarily by differences in restructuring regimes in the US and Europe, and also by the needs (and expectations) of US institutional term loan investors.
There are also a number of features typical to the European leveraged loan market which, while familiar in the US leveraged loan market, are treated in very different ways in New York, the context of Yankee Loans, many of these differing features need to be considered more carefully.
For more insight into these familiar differences, read the article recently published in The International Comparative Legal Guide to: Lending & Secured Finance 2014 by White & Case partner Jake Mincemoyer, entitled "Yankee Loans—Structural Considerations and Familiar Differences from Across the Pond to Consider."
This article first outlines key structuring considerations for Yankee Loans and then discusses some key familiar differences between the US and European leveraged finance markets, to be contemplated more carefully in the context of Yankee Loans.
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About the author: Jake Mincemoyer is a partner of the Firm's Banking Practice currently based in London. He will be returning to the New York office in the summer of 2014.
This article appeared in the 2014 edition of The International Comparative Legal Guide to: Lending & Secured Finance; published by Global Legal Group Ltd, London.
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