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Allen & Overy advises Iceland on largest sterling high yield bond of 2014

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Cruz Jeanette
Jeanette Cruz

Partner

London

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Muzilla Kevin
Kevin Muzilla

Partner

London

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Samengo-Turner William
William Samengo-Turner

Partner

London

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24 July 2014

Allen & Overy has advised Iceland Foods on its GBP950 million high yield bond, the largest sterling denominated high yield bond issuance of 2014.

The bonds consist of GBP350m senior secured floating rate notes due 2020, GBP400m 6.25% senior secured notes due 2021 and GBP200m 6.75% senior secured notes due 2024. All will be listed on the Euro MTF market of the Luxembourg stock exchange.
 
Iceland Foods is a UK-based specialist frozen food retailer with 833 stores in the UK and a presence in Spain, Portugal, Ireland and the Czech Republic.  The corporation is owned by its management team and a consortium of Brait, Landmark and Lord Kirkam who acquired the business from Icelandic banks Kaupthing and Glitnir in 2012 for GBP1.4 billion, an acquisition on which Allen & Overy advised the consortium. 
 
The proceeds of the high yield bond will be used to refinance acquisition debt incurred in 2012 and to redeem vendor loan notes issued to Kaupthing and Glitnir as part of the transaction.
 
Jeanette Cruz, partner at Allen & Overy, commented: “The size of the deal underlines the maturity and sophistication of the European high yield bond market, where investor appetite for larger returns in a low-rate environment remains. Corporates have also adapted to the challenges of diversifying their funding sources and high yield is a key part of this. The proceeds of the bond should provide Iceland with a stable capital structure for the next ten years.”
 
The A&O team was led by corporate partner George Knighton, high yield partners Jeanette Cruz and Kevin Muzilla and banking partner Jonathan Brownson.  They were supported by corporate senior associate William Samengo-Turner and associate Chloe Johnson; U.S. law advice was provided by senior associate Paul Porter, associates Maylea Ma and Jiah Ham, and summer associate Nick Fedewa. Additional support was provided by banking senior associate Ian Roebuck and associates Katherine Abraham, James Green and Abira Gupta.
 
For further information, please contact Rebecca Hooper, rebecca.hooper@allenovery.com, on +44 (0)20 3088 2152.