Co-authored by Joshua G. Kiernan, Jayanthi Sadanandan
and Scott Colwell, Latham & Watkins.
How foreign private equity sponsors and their
lenders are finding solutions to local law structuring
issues.
Leveraged finance acquisitions have existed in the Israeli
market for many years. However, for a variety of reasons, the
financings of these transactions have faced structuring challenges
mainly in relation to the credit support granted by the target
group. Many transactions, in particular with corporate sponsors,
were secured on the target's shares with recourse to the
sponsor, and required a relatively large portion of equity —
the result of local Israeli banks traditionally supporting levels
of leverage lower than those foreign banks have typically
supported. With an increasing amount of acquisitions in Israel by
foreign private equity sponsors, structures are being challenged in
an effort to maximize leverage (with limited recourse to the
sponsor, as is the trend
