Finance

Leveraged Finance Academy: Advanced Topics - 8 March 2023

Shearman & Sterling LLP

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J. Crew – Background J. Crew executed a drop-down transaction by transferring key intellectual property assets into an unrestricted subsidiary, which then leased the assets back to J. Crew. The unrestricted subsidiary then issued notes collateralized by the transferred assets to raise new money. 18 Senior noteholders secured by transferred IP Unrestricted Subsidiary Non – Guarantor (Foreign Sub) Parent Company Restricted Group Companies (1) Intellectual property is transferred or dropped down to Non-Guarantor, and then transferred again to the Unrestricted Subsidiary. (2) Unrestricted subsidiary licenses IP back to J. Crew for its continued usage. (3) Unrestricted subsidiary issues notes to participating noteholders. Notes are secured by the unrestricted subsidiary's assets (principally, the transferred IP). Liability Management and Refinancing Solutions in Europe

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