Shearman & Sterling LLP
Issue link: https://digital.shearman.com/i/1494420
Drop-Down Transactions – Typical Transactions Overview 12 Newly Issued Priority Debt Structurally Subordinated Original Issue (2) Assets are transferred/contributed to the selected NewCo to the extent permitted under the borrower's existing debt documents (potentially using multiple covenant baskets). Parent Company Borrower Non-Guarantor Restricted Sub (Potential NewCo) Unrestricted (Potential NewCo) (1) Parent Company selects appropriate Unrestricted/Non- Guarantor Subsidiary as NewCo. (3a) New priority structurally senior debt is issued at the NewCo level. (3b) Lenders participating in NewCo financing, may roll-up existing debt into NewCo. (3c) Existing borrower debt is structurally subordinated to the newly incurred debt with respect to the assets transferred/contributed to NewCo. Restricted Group Companies Liability Management and Refinancing Solutions in Europe