Investing in Distressed Debt in Europe:

This publication provides an overview of the European distressed debt market, covering debt trading, non-performing loans, direct lending, restructuring and workouts. It analyses these topics and others from a pan-European point of view.

The European distressed debt market has grown exponentially during the last few years, experiencing very significant development. Many investors have entered that market with the intention of profiting from the opportunities that this market is offering them. However, navigating the waters of the European distressed debt market has not always been easy, because this market is far from homogeneous and legal fragmentation is the norm.This co-publication with TMA Europe provides an overview of the European distressed debt market, covering debt trading, non-performing loans, direct lending, restructuring and workouts. It analyses these topics and others from a pan-European point of view, and is intended as a practical guide for anyone seeking a better understanding of the commercial and legal complexities involved in a highly fragmented market where different jurisdictions, legislative frameworks and market practices apply.Ignacio Buil Aldana, a partner in the finance and restructuring team at the London office of Spanish law firm Cuatrecasas, Gonçalves Pereira, has acted as consulting editor for the publication, which also features contributions from other leading experts in the field. Whether you are a lawyer in private practice or in industry, a financial advisor or an investor, this title aims to give you comprehensive insight into all the significant aspects of the European distressed debt market.

Foreword 7Lukas FeckerTMA Europe PresidentPreface 9Ignacio Buil AldanaCuatrecasas, Gonçalves PereiraPart I: IntroductionInvesting in distressed debt in Europe: an overview 13Tom CoxDamian MaloneMark SinjakliAlixPartnersPart II: Acquisition of distressed debtCredit agreement and indenture analysis from a European perspective 33Jacqueline IngramCadwalader, Wickersham & Taft LLPAnatomy of an LMA distressed trade transaction and transfer mechanisms under English law 43Elizabeth BilbaoMandel, Katz & Brosnan LLPOverview of distressed trading in selected jurisdictions 59FranceJérémie BismuthOlivia LocatelliDimitrios LogizidisGide Loyrette NouelGermanySacha LürkenWolfgang NardiOded ScheinKirkland & Ellis International LLPItalyGregorio ConsoliFederica ScialpiChiomenti Studio LegaleSpainBeatriz CausapéCuatrecasas, Gonçalves PereiraPart III: The European nonperforming loans (NLP) market‘Bad banks’ and their role in the financial sector deleveraging process in Europe 81Fernando MínguezCuatrecasas, Gonçalves PereiraAnatomy of a non- performing loan portfolio sale 93Paul DunbarVinson & Elkins LLPPart IV: Direct lendingThe direct lending landscape in Europe 109Nerea Pérez de GuzmánFTI ConsultingTrends in direct lending 119Andrew PerkinsSarah WardMacfarlanes LLPLegal structuring of direct lending deals in selected European jurisdictionsFrance 133Jérémie BismuthMarie Dubarry de LassalleOlivia LocatelliCaroline TexierGide Loyrette NouelGermany 141Sacha LürkenWolfgang NardiOded ScheinKirkland & Ellis International LLPItaly 149Giorgio CappelliAndrea MartinoGiovanna RandazzoChiomenti Studio LegaleSpain 157Íñigo de LuisaÍñigo RubioCuatrecasas, Gonçalves PereiraPart V: Restructuring and workoutsRecent trends in European cross-border restructurings 167Arturo GayosoDeloitte Financial AdvisorySchemes of arrangements: theory and practice 175Graham LaneIben MadsenWillkie Farr & Gallagher LLPDevelopments in the European legal framework for restructuringFrance 199Jérémie BismuthMarie Dubarry de LassalleOlivia LocatelliCaroline TexierGide Loyrette NouelGermany 215Sacha LürkenKirkland & Ellis International LLPItaly 237Giulia BattagliaAntonio TavellaChiomenti Studio LegaleSpain 249Cristóbal CottaAndrea PerellóFedra ValenciaCuatrecasas, Gonçalves PereiraRestructuring high-yield bonds in Europe 261Paul DurbanGrégoire HansenBrown Rudnick LLPThe recast EU Insolvency Regulation and its impact on distressed investing 279James BellDouglas HawthornJeremy WalshTravers Smith LLPPart VI: TaxationStructuring the acquisition and disposal of distressed debt 295Rebeca RodríguezCuatrecasas, Gonçalves PereiraLuke VassayMilbank, Tweed, Hadley & McCloy LLPAbout the authors 317