Capital markets: high-yield debt offerings in United States
‘In a league of its own’, high-yield debt heavyweight Cahill Gordon & Reindel LLP is widely acclaimed as ‘the indisputable leader in underwriter-side representations’. The New York-based group, which is admired by peers for its ‘excellent relationships with all the major banks’, ranked top in 2018 for manager-side mandates in the high-yield debt space by both deal value and deal count. Among its highlights, William Hartnett advised the initial purchasers on a string of offerings by Valeant Pharmaceuticals totaling $4.7bn, while Jonathan Schaffzin paired up with William Miller to act for the underwriters on three offerings by Equinix worth a combined €2.7bn. The firm is also widely recognized for its ‘dominant position in the LBO market’. In a recent headline on that front, the firm advised the initial purchasers and lead arrangers on over $13bn in financings to back Blackstone Group’s acquisition of a 55% stake in Refinitiv, which was one of the largest non-investment grade leveraged buyouts completed since the financial crisis — James Clark, Daniel Zubkoff and Corey Wright led that transaction. Other highly regarded senior specialists are Douglas Horowitz and John Tripodoro. The group also includes up-and-coming names Marc Lashbrook and Joshua Zelig and rising star Meghan McDermott.
Following its high-profile combination in 2018, the newly merged Hunton Andrews Kurth LLP is included for the first time in the high-yield debt category. The manager-focused group, which is recognized for its ‘depth in the energy space’, secured a solid stream of high-yield deals over the past year, with energy, utilities and financial services standing out as the key drivers of the practice. Highlights included Houston-based Jordan Hirsch advising the initial purchasers on a three-tranche private placement of notes by Sunoco LP and Sunoco Finance Corp, which totaled $2.2bn. On the financial services front, Dallas-based Steven Leshin acted for the initial purchasers on a $700m notes offering by Freedom Mortgage Corporation. Houston-based corporate co-lead Michael O’Leary, who has a strong record in energy-related offerings, is also recommended.
The manager-focused practice at Winston & Strawn LLP is a solid performer in high-yield debt transactions and secures a steady stream of midsize deals from major investment banks. In Chicago, securities specialist Cab Morris is a key contact and has a strong record for technology, energy, manufacturing and life sciences-related matters. Among his recent highlights, Morris advised the underwriters on two offerings by GATX Corporation totaling $600m. He also advised the joint bookrunners on a $300m notes offering by Baltimore Gas and Electric. Joel Rubinstein, who leads the capital markets group from New York, is also recommended.
‘A go-to firm for high-yield debt offerings’, Kirkland & Ellis LLP’s issuer-focused practice is widely recognized as ‘top-notch for private equity-related deals’ and the consensus is that ‘few firms can match its institutional private equity relationships’. The team is also noted for its ability to leverage the firm’s market-leading bankruptcy and restructuring practice, which ‘advantageously provides access to a significant volume of restructuring-related debt issuances’. Joshua Korff is ‘a heavyweight issuer-side lawyer’, but also handles manager mandates, and recently advised Teva Pharmaceuticals North America on its $2.5bn notes offering. Christian Nagler was at the helm for several of the group’s highlights during 2018, which included advising Charter Communications on its $2.5bn offering and also advising Frontier Communications on its $1.6bn offering. In Chicago, Dennis Myers assisted Navistar International with its $1.1bn offering of senior notes. Other key contacts include Richard Aftanas and Chicago’s Gerald Nowak. Sophia Hudson joined from Davis Polk & Wardwell LLP in 2018, and Philippa Bond joined the Los Angeles office from Proskauer Rose LLP in 2019. Named lawyers are based in New York, unless otherwise stated.
Latham & Watkins LLP’s ‘first-class group’ strikes an enviable balance between issuer and underwriter representations, with clients and peers alike asserting it is ‘one of the most well-rounded practices in the market’. The team, which is noted for its ‘broad sector focus’ and ‘extremely deep bench’, ranked among the top two firms by total deal value for both issuer and manager-side high-yield corporate bond offerings during 2018. Global corporate chair Marc Jaffe is ‘an institution in the capital markets space’ and recently paired up with ‘excellent’ Ian Schuman to advise Jefferies on Nathan’s Famous’ $150m senior notes offering. Houston-based David Miller is ‘a very productive counterparty’ and, together with Houston’s Michael Chambers, advised Goldman Sachs on Endeavor Energy Resource’s $800m cash tender offer and also on its new issuance of $1bn worth of notes. On the issuer side, Houston’s Debbie Yee advised Sunoco on its $2.2bn notes offering, while Century City’s Steven Stokdyk advised Churchill Downs on its $500m senior notes offering. The group also benefits from the senior experience of Michael Benjamin (‘a great all-around lawyer’), Washington DC-based Patrick Shannon and Senet Bischoff. Named lawyers are based in New York, unless otherwise stated.
‘One of the market's standout firms for high-yield debt work’, Simpson Thacher & Bartlett LLP draws praise from all corners of the market for its ‘superior subject matter expertise’, ‘clear and concise communication skills’ and ‘business-savvy and technically-minded lawyers’. The largely New York-based group, which is widely revered for both its ‘premier issuer-side practice’ as well as for ‘representing the major investment banks on a regular basis’, provides comprehensive coverage of high-yield matters, with notable firepower in multi-jurisdictional and private equity-related transactions. Sector specialist Arthur Robinson heads the global team and led the charge on several of the firm’s bank-side mandates over the past year. Most notably, he paired up with the ‘excellent high-yield lawyer’ David Azarkh to advise the underwriters, led by JP Morgan Securities, on Sprint Corporation’s upsized $1.5bn offering. Among its headline mandates for issuers, Richard Fenyes, who is ‘very responsive, proactive and creative’, advised Community Health Systems on its $1bn notes offering. In Palo Alto, William Brentani assisted Hub International on its offering of $1.3bn worth of senior notes. Other key contacts include up-and-coming partner John Ericson, who advised the initial purchasers on a $702m high-yield notes offering by WeWork, and Kenneth Wallach.
Cleary Gottlieb Steen & Hamilton’s New York-based practice is characterized by its ‘great commercial sense’, ‘strong negotiation skills’ and ‘solution-oriented service’. The group, which is a popular choice for both issuers and managers, is also widely recognized for its expertise in global, particularly Latin America-related, deals. Among its recent issuer representations, Sung Kang advised Western Digital on its $2.3bn senior notes offering. Kang also paired up with Craig Brod to advise Alcoa on a $500m notes offering. On the manager side, David Lopez advised the initial purchasers on concurrent high-yield notes offerings by finance subsidiaries of Teva Pharmaceutical Industries, worth $1.2bn and €700m, respectively, and listed on the Global Exchange Market of the Irish Stock Exchange. In another notable cross-border deal, Duane McLaughlin advised the initial purchasers on a €650m high-yield global debt offering by Mexico cement giant CEMEX. Other recommended names include Jeffrey Karpf, who advised the underwriters on JELD-WEN’s $800m high-yield dual tranche notes offering; Latin America specialist Jorge Juantorena; and experienced counsel David Webb.
According to sources, Cravath, Swaine & Moore LLP's New York-based group ‘is among the strongest manager-side specialists in the market’, and also receives a steady stream of mandates from high-yield debt issuers. A top choice for banks to advise on major, event-driven deals, the firm regularly demonstrates that it can turn its hand to sophisticated transactions in any sector. The diverse practice has worked to increase its market share of energy deals, which has recently included financing co-head Stephen Burns advising the underwriters on Chesapeake Energy’s $1.2bn high-yield debt offering. The healthcare industry also proved a significant source of mandates during 2018, where Johnny Skumpija acted for the initial purchasers in a $1.8bn high-yield senior notes offering by Centene Escrow I Corporation, a wholly-owned subsidiary of Centene Corporation. On the issuer side, financing co-head William Fogg and recently promoted partner Michael Mariani advised TerraForm Power Operating, a portfolio company of Brookfield Asset Management, on its $1.2bn high-yield debt offering. Other key contacts include Joseph Zavaglia, who spearheaded the firm’s advice to the initial purchasers on Community Health Systems’ $1bn senior secured notes offering, financing co-head Craig Arcella and North America capital markets lead Andrew Pitts.
Davis Polk & Wardwell LLP
‘One of the leading capital markets practices in the country’, Davis Polk & Wardwell LLP is held up by clients as an ‘exceptional underwriter-side counsel’. The group also continues to increase its share of company-side representations; most notably, it ranked among the top six issuer-side firms in the USA for deal value during 2018. The ‘absolutely first-rate group’ comprises ‘extremely practical and knowledgeable lawyers’, with department co-head Michael Kaplan widely hailed as ‘one of the true heavy-hitters in the market’. In a highlight example of the firm’s recent run of headline issuer-side deals, Kaplan advised Valeant Pharmaceuticals on a string of high-yield notes offerings totaling $6.8bn. On the West Coast, Menlo Park-based Alan Denenberg advised Equinix on three offerings of high-yield notes worth a combined €2.7bn. Meanwhile, the firm also continued to win top roles for managers, which included Kaplan and Derek Dostal advising the representatives of the initial purchasers on two high-yield debt offerings by Coty worth $550m and €800m, respectively. Kaplan also paired up with ‘very strong’ younger partner Shane Tintle to advise the representatives of the initial purchasers on a $1.5bn high-yield senior notes offering by Hilton.
Debevoise & Plimpton LLP houses a robust issuer-side practice, which is particularly well versed in representing private equity funds, and their portfolio companies, in high-yield debt offerings. The group, which also acts for public companies and underwriters, has a solid track record in sophisticated event-driven deals, often involving acquisition finance, restructuring or leveraged recapitalization elements. In a recent example of its strong suit, capital markets co-lead Steven Slutzky advised Clayton, Dubilier & Rice and American Greetings on the sale of $282.5m of senior notes in connection with CD&R’s acquisition of a 60% ownership stake in American Greetings. In another private equity-related highlight, Paul Rodel advised Brand Industrial Services, a portfolio company of Clayton, Dubilier & Rice, on its $300m tack-on offering of senior unsecured notes. Other representative clients include Booz Allen Hamilton and Warner Music Group. Matthew Kaplan co-heads a New York-based group, which also includes Peter Loughran.
Paul, Weiss, Rifkind, Wharton & Garrison LLP’s ‘supportive, practical and flexible group’ is noted for its ability to ‘maintain a level of partnership that goes beyond a client-provider transactional relationship’. The New York-based practice group, which is hailed by sources as ‘really strong for issuers’, enjoys close links with major private equity firms, such as Apollo, and their portfolio companies. Among its recent highlights, finance co-head Gregory Ezring (‘a very strong capital markets specialist’) acted alongside Catherine Goodall to advise EP Energy, in which Apollo is a significant shareholder, on its $1bn offering of senior notes. Ezring also paired up with Christopher Cummings, who splits his time between New York and Toronto, to advise Stars Group on its $1bn high-yield debt offering to finance its $4.7bn acquisition of Sky Betting & Gaming from CVC Capital Partners and Sky. John Kennedy, ‘a talented and dedicated’ contact, and David Huntington, ‘a very commercial’ lawyer, are other key names in a group, which has also recently undertaken work for Hunt Companies, CDK Global and Garrett Motion.
Skadden, Arps, Slate, Meagher & Flom LLP
Skadden, Arps, Slate, Meagher & Flom LLP has a comprehensive high-yield debt practice, which regularly works in conjunction with other departments within the firm to handle complex, multi-layered transactions. Equally adept at representing issuers and managers, over the past year the New York-based group has been particularly prolific in advising companies on first-time issuances. In a recent example, Ryan Dzierniejko (who splits his time between New York and Toronto) and of counsel Stacy Kanter advised WeWork on its inaugural high-yield offering of $702m worth of senior unsecured notes. In addition, Dwight Yoo advised Acrisure and its newly created subsidiary, Acrisure Finance, as co-issuers on a $925m high-yield offering, which was the first debt offering by the insurance broker. On the manager side, David Goldschmidt advised the joint bookrunners on two high-yield debt offerings by Starwood Property Trust totaling $1bn. Gregory Fernicola and Michael Zeidel are also recommended.
Clients of Weil, Gotshal & Manges LLP highlight the firm’s ‘deep bench’ and ‘exceptional knowledge of the capital markets’ among its key attributes. The New York-based group has an impressive record in advising issuers, particularly private equity clients, in high-profile offerings, and also utilizes the firm’s wider global network to offer strong capability in cross-border transactions. Corey Chivers enjoys an increasingly prominent reputation for high-yield debt offerings and recently advised Avolon Holdings (Ireland) on its $1bn offering of senior unsecured notes; he also assisted AMC Entertainment Holdings with its $600m issuance of senior unsecured convertible notes to Silver Lake to finance AMC’s repurchase of a portion of its stock held by Dalian Wanda Group (China). Alexander Lynch heads the department.
The ‘extremely responsive’ group at Baker Botts L.L.P. distinguishes itself by its ‘great attention to detail’ and ‘strong focus on the energy industry’. The increasingly prominent group, which strikes a good balance between issuer and underwriter-side mandates, was bolstered in 2018 by the hire of Justin Hoffman, who joined in Houston from Kirkland & Ellis LLP. Recent bank-side work included Washington DC-based Catherine Gallagher advising the initial purchasers on Teekay Offshore Partners’ $700m private placement of high-yield notes. On the issuer side, Dallas-based Preston Bernhisel advised Clearway Energy Operating on a $600m notes offering, while Austin’s Mollie Duckworth advised Tallgrass Energy Partners on a $500m high-yield debt offering. The group has also recently advised Jones Energy Holdings, Chesapeake Energy and LGI Homes on high-yield offerings. Also recommended is Houston-based Joshua Davidson, who heads up the capital markets group, ‘excels at achieving favorable results for his clients’.
‘A go-to firm for private equity sponsors’, Fried, Frank, Harris, Shriver & Jacobson LLP is praised for its premier acquisition finance practice, which specializes in advising clients such as AEA Investors, New Mountain and Onex on bond offerings. The New York-based group is also a popular choice for corporate issuers and underwriters looking for support on sophisticated high-yield debt transactions. Of recent note, the firm won its first instruction from T-Mobile, which turned to capital markets head Daniel Bursky and impressive younger partner Mark Hayek for advice on its high-profile $5bn high-yield debt offering. On the manager side, it advised the initial purchasers on a $350m high-yield notes offering by Warrior Met Coal — Bursky, Andrew Barkan, Meredith Mackey and Joshua Coleman co-led that work.
Highly regarded as ‘a leader in the Midwest market’, Ohio-headquartered Jones Day fields a deep national practice, which benefits from strong teams across the country. The issuer-dominated group handles offerings across a wide range of industry sectors, with energy and technology companies among its largest repeat-issuer clients. Among the names to note, Cleveland-based Kimberly Pustulka brings to bear an impressive track record in high-yield debt deals and recently advised MPLX, a subsidiary of Marathon Petroleum, on its $5.5bn offering of senior notes. Sprint Corporation is another key client, which turned to the firm for assistance with its issuance, by three wholly-owned subsidiaries, of $3.9bn worth of wireless spectrum-backed notes -- New York-based Eric Maki and Houston-based Kelly Turner led that deal. Other key contacts include Chicago-based Edward Winslow and Cleveland’s Michael Solecki.
Over recent years, Proskauer Rose LLP’s capital markets practice has broadened its representation of investment banks to strike a more even balance between issuer and manager-side work, with Credit Suisse, Jefferies and William Blair among its key clients. The group also expanded laterally with a double hire into Washington DC: Karen Garnett, who brings to bear a strong regulatory background, joined from the SEC, while business development company specialist William Tuttle joined from Dechert LLP. Among its manager-side highlights, New York-based department co-chair Frank Lopez advised Citigroup and JP Morgan, as underwriters, on two high-yield offerings by Five Point Operating Company totaling $500m. The US group also enjoys a strong record in cross-border deals, where it routinely draws upon the senior experience of European high-yield lead Maximilian Kirchner, who splits his time between London and New York. Justin Breen, who heads the leveraged finance team, is also noted.
‘A great issuer-side firm’, Ropes & Gray LLP is distinguished by its specialist private equity expertise, with sources valuing its ability to leverage ‘strong understanding of private investments and requirements on capital markets transactions’. The team comprises ‘non-confrontational and tireless lawyers’, and also attracts praise for its ‘in-depth knowledge of products and markets’ as well as its commitment to providing ‘seamlessly coordinated solutions across the firm’. In New York, ‘amazing attorney’ Stefanie Birkmann has ‘a great ability to adapt to clients’ and other attorneys’ styles’; she advised Samsonite International on its first-ever European high-yield offering, involving a €350m senior notes issuance. New York-based leveraged finance expert Alexander Zeltser is also singled out for providing ‘keen insights which are critical to getting the best result’; he assisted Coca-Cola Beverages Florida with its $375m private offering of notes. Other senior contacts in the ‘extremely knowledgeable and available’ group include Boston-based global finance co-head Byung Choi and New York-based Jay Kim.
Shearman & Sterling LLP houses a broad capital markets practice, which draws particular praise for its ‘great relationships with underwriters’ and ‘strong profile in Latin American deals’. The firm’s Canada expertise is also a significant pillar of the practice and Jason Lehner, who splits his time between New York and Toronto, handled several high-yield debt offerings involving Canadian companies over the past year. Most notably, he advised the underwriters on Mountain Province Diamonds’ $330m private placement. On the US side, Lehner advised the joint bookrunners on notes offerings worth $1.7bn by Wand Merger Corporation. The firm also acts for issuers, which included Lisa Jacobs (‘incredibly hard working with excellent judgment’) advising to American Axle Manufacturing on its $400m notes offering and concurrent debt tender offer. Also recommended are Harald Halbhuber and Ilir Mujalovic.
Oil and gas powerhouse Vinson & Elkins LLP is praised for its ‘encyclopedic knowledge of key terms and structuring for energy issuers and underwriters’. The national group, which ‘stands at the leading edge of trends in the capital markets’, also impresses with its ‘first-hand experience of marquee transactions’ and its ‘broad relationship network’. David Stone is a key contact for high-yield debt offerings and teamed up with counsel Daniel Spelkin and of counsel Michael Harrington to advise Targa Resources Partners on its $1bn offering of senior notes. On the manager side, the same team advised Deutsche Bank as lead underwriter on Tullow Oil’s $800m offering of senior notes. The firm has also recently handled work for issuers outside the energy sector, including Belden and Enviva Partners. Named attorneys are based in Houston.
White & Case LLP’s practice continues to go from strength to strength; the firm even managed to increase its market share of high-yield debt value during 2018, despite plummeting deal volumes in the US. The New York-based team, which regularly works in conjunction with other US and global offices, has worked to balance its practice and now acts on a relatively even split of high-profile mandates for both issuers and managers. Jonathan Michels is a key figure in the group and led on several recent highlights, including advising the joint bookrunners on two offerings by CURO Financial Technologies totaling $825m. He also paired up with David Nam to advise Roark Capital as private equity sponsor and its portfolio company, Arby’s Restaurant Group, on a $485m high-yield senior notes offering as part of a $3.1bn finance package to support Arby’s acquisition of Buffalo Wild Wings. Other key contacts include Gary Kashar and Andrew Weisberg, as well as Latin America specialist Taisa Markus, who recently joined from Paul Hastings LLP.
Akin Gump Strauss Hauer & Feld LLP leverages its robust energy practice to specialize in advising issuers from the energy and natural resources sectors on high-yield debt offerings. New York-based Rosa Testani, who brings to bear a strong record in private equity work, is a key contact and recently assisted key client Warrior Met Coal with two high-yield debt issuances totaling $475m. Testani also advised CEVA Logistics on a €300m high-yield notes offering.
‘Strategic and solution-focused’, Clifford Chance’s New York-based practice is mainly active for issuers and brings to bear strong expertise in the specialty finance arena. In a recent example of its niche strength, Gary Brooks advised Oxford Finance, and its wholly-owned subsidiary Oxford Finance Co-Issuer II, on a $300m senior unsecured notes offering. The practice group also draws upon its international offices for support on cross-border deals, which recently included Jonathan Zonis acting alongside teams in London and Sao Paulo to advise Multibank on its $300m notes issuance. Hugo Triaca, who recently joined from Skadden, Arps, Slate, Meagher & Flom LLP, is noted for his ‘strong understanding of the Latin American landscape’.
Dechert LLP’s high-yield debt practice is mainly active on behalf of issuers, with its client roster dominated by life sciences companies and permanent capital vehicles. The practice group, commended by sources for its ‘collaborative and business-focused approach’, can also draw on its global network for support in multi-jurisdictional matters. In Philadelphia, Stephen Leitzell recently advised B&G Foods on a $400m senior notes offering. New York-based life sciences expert David Rosenthal and Boston-based Thomas Friedmann co-chair the department.
Gibson, Dunn & Crutcher LLP
The ‘deep and diverse’ capital markets practice at Gibson, Dunn & Crutcher LLP enjoys ‘a strong national presence’, with its sizeable department split largely between New York and California and also benefiting from platforms in Texas and Colorado. Traditionally more robust on the issuer side, the group secured an impressive string of high-profile manager representations over the past year, utilizing its growing Texas presence to attract in energy-related matters. Most notably, Dallas and Houston-based Doug Rayburn advised the underwriters on SM Energy’s $500m high-yield debt offering and tender offer. In a significant M&A-related highlight, Los Angeles-based practice co-chair Peter Wardle advised BWAY on its $1bn acquisition of Industrial Container Services, which included a high-yield bond financing. New York-based Andrew Fabens, Houston’s Hillary Holmes and San Francisco-based Stewart McDowell also co-chair the department.
The ‘solid and experienced group’ at Mayer Brown is most active on the issuer side, with notable strength in the financial services and energy and natural resources spheres. Edward Best, who co-chairs the practice from Chicago, is a key contact and recently advised Kirby Corporation on its $500m high-yield debt offering of senior notes. In another energy-related transaction, Houston-based William Heller assisted Halcón Resources with its $200m high-yield debt offering. Anna Pinedo and Jon Van Gorp also co-chair the department from New York and Chicago respectively.
Milbank’s institutional relationships with major lenders marks it as a solid manager-side firm; however, its increasingly prominent work for issuers was also a driving force of the practice during 2018, with particularly impressive transactions for energy and gaming companies. Most notably, US securities lead Rod Miller advised MGM Resorts International on its $1bn senior notes offering, while Brett Nadritch advised Nabors Industries on a $800m high-yield offering. On the manager front, Miller and Benjamin Miles acted alongside the firm’s leveraged finance team to advise the initial purchasers for the euro and dollar-denominated senior unsecured notes in connection with KKR’s acquisition of BMC software — the bond portion of the transaction was worth $1.8bn. The New York-based Paul Denaro is another key figure.
‘Dedicated to providing excellent service’, Paul Hastings LLP scores highly for its ‘incredibly reliable, thoughtful and innovative team’. The New York-based practice has a distinct emphasis on manager representations, but also brings to bear significant issuer-side experience, particularly in Latin America-related deals. The ‘deeply knowledgeable’ John Cobb leads the group and is noted as ‘a valuable asset on structured deals’; he recently advised the initial purchasers on a $1.4bn senior notes offering related to Meredith Corporation’s acquisition of Time. The group’s ability to plug into its global network on cross-border deals is also a recurring theme among sources; in a recent example of its multi-jurisdictional strength, Cobb acted alongside the London office to advise Goldman Sachs, as representative for the initial purchasers, on Dynegy’s $850m private offering. Arturo Carrillo and Latin America head Michael Fitzgerald are also recommended.