Hengeler Mueller advises on largest corporate liability management transaction in Europe

01. March 2017

Hengeler Mueller has advised Citibank Global Markets Limited and Royal Bank of Scotland plc (trading as NatWest Markets) in their capacity as solicitation agents or dealer managers on the largest corporate liability management transaction in Europe outside the finance sector to date. Following the IPO of the subsidiary innogy SE, 18 issued or guaranteed bonds of RWE AG in a total nominal amount of approximately EUR 11 bn were intended to be transferred to innogy SE as issuer or guarantor, respectively. This required an affirmative resolution of the bondholders of 16 of the bonds. In all these cases, the bondholders approved the transfer with the required majority of 75%. In two cases the decision was referred to a bondholders’ meeting because the required quorum had not been reached in the initial written vote. For two bonds, a resolution in accordance with the German Bond Act (Schuldverschreibungsgesetz) was not possible. In those two cases, an exchange offer was made which was widely accepted.

For this innovative transaction, the electronic voting via clearing systems, as customary with international investors, was for the first time brought in line with the legal requirements of the German Bond Act (SchVG), in particular regarding the notarial supervision and notarization of the resolutions, thereby further promoting the international recognition of the German Bond Act.

The Hengeler Mueller team was led by partner Hendrik Haag and included partner Johannes Tieves (both Capital Markets, Frankfurt) as well as associates Jochen Schnepper, Conrad Ruppel and Jan Letto Steffen (all Capital Markets, Frankfurt). Responsible for this transaction within RWE’s in-house legal department was Christian Kuhn and within innogy’s in-house legal department Tobias Empting.