The Strategic Finance Group at Sullivan & Cromwell specializes in developing and executing debt financings, particularly those that fund transformative events in the life span of a company – mergers, acquisitions, dispositions, spin-offs, recapitalizations, insolvencies and restructurings.

The S&C Approach

Our teams involved in strategic financing transactions bring together lawyers with expertise in equity and debt capital markets, M&A, private equity, hedge funds, commercial real estate, bank lending, banking, tax and bankruptcy. The strength of S&C’s strategic finance practice is inseparable from the strength of our other practice areas, although several of our partners have focused on leveraged financing and commercial lending transactions as the foundation of their practices.

Our practice crosses product lines, industries, leverage levels and credit strengths. Lawyers within the Firm have extensive experience with working capital lines, warehouse facilities, liquidity facilities, loan participation programs, structured credit, senior secured loans, second-lien debt, subordinated debt, mezzanine debt, PIK instruments, preferred stock, equity bridges, convertible notes, high yield bonds, hybrid securities, commercial paper programs, swaps and other hedging mechanisms, asset-backed loans and asset-backed securities.

Sullivan & Cromwell advises a range of principals and participants in strategic financing transactions, including: lending syndicates, underwriters, single lenders, single borrowers and borrowing groups, purchasers or sellers of loan participations or assignments, financial advisors, investors, private equity funds, hedge funds and industrial companies. We represent issuers and underwriters of public investment grade and below investment grade debt and borrowers and lenders across the range of debt products. We are often consulted by providers of debt to assist in the development and innovation of financial products and by borrowers to advise in connection with a fundamental change in their capital structure or an initial foray into a new part of the debt markets.

Regions and Industries

S&C is a global firm. Our Strategic Finance Group, like our other core practice areas, serves clients around the world. Every office in the Firm has one or more partners who practice in this area and we frequently consult one another to stay current on market trends and developments.

Selected Recent Highlights

Sullivan & Cromwell advised Barclays on the $2 billion financing provided to BlackRock, Inc. for its acquisition of Barclays Global Investors Inc.

S&C advised Fiat S.p.A. and New Chrysler in the restructuring of Chrysler LLC. Under the transaction, New Chrysler acquired the operations of Chrysler LLC through an accelerated bankruptcy process in which the US and Canadian governments provided debtor-in-possession and acquisition financing. Fiat formed New Chrysler and remains Chrysler's key industrial partner, holding a significant equity stake.

S&C acted as finance counsel for InBev’s acquisition of Anheuser Busch in connection with $54.8 billion of financing consisting of $45 billion of senior facilities and $9.8 billion of bridge facilities.

As designated lenders’ counsel for CEMEX, the Mexican cement giant, S&C represented a consortium of banks in a novel $1.05 billion syndicated loan that is structured to constitute equity under International Financial Reporting Standards and debt under local tax law.

Additionally, in 2008 S&C represented a consortium of nine banks in connection with the $6.5 billion aggregate amount of mortgage and mezzanine loans to subsidiaries of Harrah’s Entertainment. The mortgage loan is secured by certain real property and related operating assets located in the U.S. and the mezzanine loans are secured by direct and indirect interests of the owners of such real property and operating assets. The loans were made in connection with the leveraged buyout of Harrah’s by Apollo Management and TPG Capital. Also on the lender side, in 2008, S&C represented Lehman as arranger for the $2.08 billion acquisition financing for Fairpoint Communications.

On the borrower side in 2008 we have represented: Finmeccanica, an Italian conglomerate with operations in the aeronautics, defense and security sectors, on the financing (initially consisting of a $4.95 billion syndicated loan) related to the acquisition of DRS Technologies Inc., a U.S. supplier of defense electronics products; China Huaneng Group (China) and its wholly-owned subsidiary SinoSing Power Pte. in the $3 billion financing (consisting of a bridge loan and loans from Bank of China and China Eximbank) for the acquisition of Tuas Power Ltd., the supplier of 25% of Singapore’s energy consumption; and StatoilHydro and Total, as two of three sponsor-borrowers, in a restructuring of the senior debt of Sincor, the largest of four extra-heavy oil projects in the Orinoco Basin of Venezuela.

In 2007, borrowers S&C represented include Collective Brands (formerly Payless ShoeSource, Inc.) in the $1.1 billion financing in connection with its acquisition of Stride Rite Corporation; Eisai Co., Ltd. (Japan) in the $3.7 billion financing in connection with the acquisition of MGI PHARMA, Inc.; Fender Musical Instruments in its $285 million refinancing; First Data in connection with its acquisition by an investor consortium led by KKR; Fiserv in the financing in connection with its $4.4 billion acquisition of CheckFree Corporation; Goldman Sachs Whitehall Funds in the € 2.7 billion financing for its acquisition of a commercial real estate portfolio from Degi, the largest German real estate transaction of 2007, and in the € 1.7 billion financing of its acquisition of the commercial real estate portfolio from Allianz, one of the five largest German real estate transactions of 2007; subsidiaries of Ontario Teachers’ Pension Plan Board (“OTPPB”) in the financing for the $2.4 billion acquisition by OTPPB of four North American container terminals located in the Vancouver and New York areas from Orient Overseas (International) Limited; Sintonia, an investment holding company wholly owned by the Benetton family, in the approximately € 2.8 billion aggregate amount of senior loan facilities; Swisscom/Swisscom Italia in the $6.6 billion (equivalent) financing for the acquisition of Fastweb, an Italian broadband provider; and Transportadora de Gas del Sur (Argentina) in a three part refinancing of indebtedness consisting of a tender offer, a new notes offering, and an optional redemption and prepayment.

In 2007 the transactions in which S&C represented the lenders include representing Bank of Scotland, New York Branch in a $400 million loan agreement with a mortgage lender; Goldman Sachs International and Deutsche Bank with respect to the approximately $650 million refinancing for HONSEL, a German automobile parts manufacturer owned by Ripplewood and other private equity investors (for which S&C provided advice with respect to U.S., English, French and German law); and Morgan Stanley Senior Funding in financings for numerous borrowers.

Selected other clients recently served by S&C’s Strategic Finance Group include Australian company ABC Learning Centres; cable service providers Cablevision Systems Corporation and Adelphia Communications; restaurant operator Brinker International; medical device company CONMED Corporation; chemical and materials company Cytec Industries; satellite television service provider EchoStar; Goldman Sachs Infrastructure Partners; petroleum refining company Hovensa; reinsurance company IPC Holdings; boutique hotel owner Morgans Hotel Group; insurance company PMI Group; cable television entertainment company Rainbow National Services; publishing company RR Donnelley; electronic payment systems developer VeriFone Inc.; Vornado Realty Trust; and healthcare service company UnitedHealth Group.