Shearman & Sterling LLP
Issue link: https://digital.shearman.com/i/1494420
A New Frontier? – Diebold's A&E Proposal In Oct 2022, in addition to the now familiar threat of covenant stripping, US financial & retail technology group Diebold Nixdorf requested majority noteholder consent to extend the grace period for failure to make an interest payment from 30 days to the maturity date of the 2024 unsecured notes (the "2024 Notes"), to incentivise the noteholders to exchange into the new second lien notes. The effect being that an Event of Default in respect of non-payment of interest would not occur until maturity of the 2024 Notes, removing the ability of noteholders to accelerate for failure to pay interest. 36 • One of the "sacred" rights requiring all noteholder consent is an extension to the stated time for payment of interest. • Under the 2024 Notes, interest must be paid on 15 April and 15 October each year, but holders can enforce their rights only 30 days of non-payment. • The argument would be that the proposed amendment does not extend the stated time for payment of interest; rather it extends the date on which noteholders can enforce their rights to receive those payments. Liability Management and Refinancing Solutions in Europe