Freshfields
19 Experts
1 Contributions by Freshfields
PRACTICE NOTES
What does this Practice Note cover?
This Practice Note introduces high yield bonds. It addresses:
the types of investors in these securities, such as institutional investors and funds
the motivations for investing, including benefits versus loans (for example, the potential for higher returns)
the issuers of these instruments, typically corporates with sub-investment grade credit ratings
an outline of the high yield bond market, covering its size, principal participants and usual features
What are high yield bonds?
Bonds are capital markets instruments that constitute a form of debt security. For more on capital markets and bond issues, see Practice Note: Key features of the debt capital markets. High yield bonds—also known as junk bonds or speculative grade bonds—generally provide investors with higher rates of return than other corporate bonds because they are considered riskier investments. High yield bonds are typically rated below
Banking & Finance
7 Contributions by Freshfields Experts
PRACTICE NOTES
Introduction
This Practice Note explores the implications of the Financial Conduct Authority’s (FCA) Consumer Duty for wholesale firms. For the purposes of this note, a wholesale firm broadly means a firm active in the wholesale financial services markets that lacks a direct relationship with retail customers for the relevant product or service offered. Because the Consumer Duty is confined to a firm’s retail market business, and to financial promotions that are addressed to, or distributed so they are likely to reach, a retail customer, some wholesale activities fall outside the scope of the Duty. However, where a firm operates within a distribution chain that ultimately involves an end retail customer, the Consumer Duty applies to the extent the wholesale firm determines or materially shapes retail customer outcomes in practice. This Practice Note examines the scoping analysis for wholesale firms, including relevant
Financial Services
PRACTICE NOTES
What are investment-grade, high yield and crossover bonds?
Investment grade (IG) bonds are debt instruments that hold an IG credit rating: BBB and above on the S&P and Fitch scales, and Baa3 and above on the Moody’s scale (for further detail on credit ratings, see Practice Note: Credit ratings). IG issuers are usually sizeable blue‑chip corporates—well‑known, well‑established and well‑capitalised—and are often companies with shares listed on a major stock exchange. Aside from sovereign bonds of developed markets, IG securities are widely regarded as among the safest income‑generating investments. As a consequence of this perceived safety, IG bonds tend to offer lower yields than high yield (HY) bonds. Many institutional investors and pension schemes operate policies and mandates that constrain their bond holdings to assets with, on average, lower default risk, such as IG instruments or government obligations. In broad terms, HY bonds
Banking & Finance
PRACTICE NOTES
The Pension Schemes Act 2021
On 11 February 2021, the Pension Schemes Act 2021 (PSA 2021) obtained Royal Assent. It amends the Pensions Act 2004 (PA 2004), introducing measures with significant consequences for corporate and restructuring transactions involving companies or groups that run UK defined benefit schemes, including:
Two criminal offences—‘avoidance of employer debt’ and ‘risking accrued scheme benefits’—effective from 1 October 2021. This Practice Note addresses these offences.
Broader grounds for the Pensions Regulator (TPR) to issue a contribution notice (CN) under its moral hazard powers, making third parties liable to help fund a scheme deficit, via two new threshold tests: the ‘employer insolvency test’ and the ‘employer resources test’. These also took effect on 1 October 2021. For an overview of CNs, see Practice Note: Contribution Notices.
Expanded
Pensions
PRACTICE NOTES
UK databases—scope, Brexit and assimilated law
Over the two decades leading up to Brexit, EU legislative initiatives heavily shaped the UK’s database protection regime. After the UK’s departure, any EU laws created or brought into effect after 31 December 2020 (IP completion day) no longer bind the UK. Earlier EU measures were carried over into a new category of domestic law—retained EU law—under the European Union (Withdrawal) Act 2018 (EU(W)A 2018), and UK courts continued to apply pre‑2021 case law on that body of law. The European Union (Withdrawal Agreement) Act 2020 amended the EU(W)A 2018 and established an implementation period commencing on 31 December 2020. During that interval, the legal position was held in place unless the UK Parliament expressly altered it. From that point, UK courts could take into account, but were not obliged to follow, principles or judgments of the EU courts
IP
PRACTICE NOTES
ARCHIVED: This content was published in 2021 and is not maintained.
The Market Standards trend report delivers detailed examination of the 42 firm offers, 45 possible offers and 13 formal sale processes and/or strategic reviews announced by Main Market and AIM companies subject to the Takeover Code in 2020. It shares insight on public M&A patterns and what we and our contributors anticipate for 2021 and beyond.
What does the Market Standards trend report cover?
Topics explored include:
transaction value and volume
transaction structures
hostile, rival and mandatory bids
P2P transactions
domestic and international bidder activity
sector focus
post-offer statements of intention (POI statements) and COVID-19
legal and regulatory changes
outlook for 2021
The report also studies high‑profile deals, such as Intact Financial and Tryg’s £7.2bn bid for RSA Insurance Group, GardaWorld’s £3.7bn hostile bid for G4S, Allied
Corporate
PRACTICE NOTES
ARCHIVED: This content was published in 2020 and is not maintained. The Market Standards trend report delivers detailed analysis of the 12 binding offers and ten potential offers made for Main Market and AIM companies subject to the Takeover Code in H1 2020. It also provides insight into public M&A patterns and what we might anticipate in H2 2020 and beyond.
What does the Market Standards trend report cover?
deal value and volume
private equity deal activity
UK and foreign bidder activity
industry focus
deal structures
post-offer statements of intention
shareholder activism
coronavirus (COVID-19) issues and impact
legal and regulatory developments
What are the highlights from the report?
The economic uncertainty arising from the coronavirus (COVID-19) pandemic has had a material effect on public M&A activity, with activity notably lower in Q2 2020. In H1 2020 there were 12 firm offers announced, compared with 33 firm offers in H1 2019 and 33 firm...
Corporate
PRACTICE NOTES
ARCHIVED: This content was published in 2020 and is not maintained.
The Market Standards trend report presents detailed examination of the 66 firm offers and 45 possible offers made for quoted companies governed by the Takeover Code during 2019. It also shares insight into public M&A patterns and what we might expect in 2020 and thereafter.
What does the Market Standards trend report cover?
transaction value and volume
private equity participation
hostile takeovers and rival bids
sector focus
UK and overseas bidder activity
shareholder activism
post-offer undertakings and national security undertakings
legal and regulatory developments
The report assesses headline transactions, including the Takeaway.com/Prosus competing bids for Just Eat, Advent International’s £4bn offer for Cobham, the £2.6bn consortium bid for Inmarsat, and Non-Standard Finance’s £1.3bn hostile approach for Provident Financial.
What are the highlights from the
Corporate
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