Simpson Thacher has an extensive practice in Rule 144A and registered high-yield financings, many for first-time issuers. Because issuers of high-yield securities have weaker credit characteristics than investment grade issuers, special skills are required to craft covenants that afford protections for investors while at the same time providing the issuers with the flexibility to grow and to respond to changes in their businesses.
The Firm’s leadership position in the area of high-yield securities is attributable to the Firm’s strength in both underwriter and issuer representations. On the one hand, the Firm has handled transactions involving leading underwriters of high-yield securities including J.P. Morgan Securities and Goldman Sachs & Co. On the other hand, because the Firm has the leading private equity practice in the world and many acquisitions by private equity sponsors include a high-yield financing, the Firm regularly represents issuers of high-yield securities. The dual strengths of the Firm’s high-yield practice affords attorneys an uncommon opportunity to develop a wide range of valuable capital markets skills.
The Firm’s high-yield capital markets practice is also closely allied to the Firm’s leading bank financing practice. The Firm’s leveraged finance attorneys often work in tandem with credit lawyers in preparing “bridge” financing documentation for acquisitions and negotiating intercreditor agreements.