Global law firm White & Case LLP has advised Kiko S.p.A. on the amendment of debt facilities and a euro private placement made in relation to the acquisition of a minority interest in Kiko's share capital by Peninsula Capital.

The Firm advised Kiko on amendments to the agreements underlying its €152 million facilities agreement in December 2014 with lenders UniCredit, Banca Nazionale del Lavoro, Banca Popolare di Milano, Société Générale, BBVA and UBI Banca, and to the agreements with noteholders of its €100 million bond also issued in December 2014.

Established in 1997, Kiko is an Italian professional cosmetics brand.

The White & Case which advised on the transaction included partners Michael Immordino (London & Milan), Iacopo Canino (Milan), Yoko Takagi (Madrid), Samir Berlat and Gregoire Karila (all Paris), local partner Paul Alexander (Milan), associates Davide Diverio (Milan), Julio Peralta, Elisabeta Pérez-Ardá Precioso (both Madrid), Boris Kreiss, Arthur de la Fage, Ginevra Marois and Jeremy Tong (all Paris) and lawyer Charles English (Milan).

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On July 24, 2018, Local Partner Carsten Lösing, Partner Benjamin Saul and Pratin Vallabhaneni hosted a Webinar covering initial coin offerings (ICOs) in the international context, with a particular focus on the European Union and the United States. They described the anatomy of an ICO, the various forms in which tokens can be structured, the respective legal consequences and ways to deal with the respective challenges.

Speakers

Carsten Lösing, Local Partner, Hamburg

Benjamin Saul, Partner, Washington, DC

Pratin Vallabhaneni, Partner, Washington, DC

Tuesday, 24 July 2018

4:00 p.m. CEST

Duration: 45 minutes

Click here to download the presentation.

Twenty-five White & Case partners were selected by The Legal 500 for induction into The Legal 500 Hall of Fame, which "highlights individuals who have received constant praise by their clients for continued excellence," according to The Legal 500.

To be inducted into the Hall of Fame, a lawyer must have been recognized by The Legal 500 as one of its elite leading lawyers for eight of the last ten years, up to and including the 2017 edition.

In addition to publishing the names of the White & Case partners in its Hall of Fame announcement, The Legal 500 also published an interview with Firm Hall of fame inductee Paul Friedland (New York).

The table below lists the White & Case partners named to the Hall of Fame. Several partners are honored in multiple sections/work areas.

Daniel Rogits advises banks and other financial institutions, private equity investors and corporates in connection with acquisition finance, loan / bond structures, leveraged finance, syndications, corporate finance as well as in connection with high-yield debt offerings and public and private debt and equity transactions.

Before joining White & Case in 2018, he worked over 4 years at another major international law firm.

Global law firm White & Case LLP has advised Cassa di Risparmio di Asti S.p.A. and its subsidiary Cassa di Risparmio di Biella e Vercelli – Biverbanca S.p.A., as originator and notes subscriber, on the disposal of a portfolio of non-performing loans (NPLs) comprising ipotecari mortgage loans and unsecured loans.

The loan portfolio was sold to Maggese S.r.l., a securitization vehicle created ex lege 130/99, for an aggregate gross total amount of approximately €697 million.

Following the acquisition of the loans, Maggese S.r.l. issued three classes of notes: senior notes for a total value of approximately €171 million, rated in line with the Italian State guarantee scheme for the senior tranches of NPLs ABS (GACS); mezzanine notes for a total value of approximately €24 million; and junior notes for a total value of approximately €11 million. The transaction was structured by Mediobanca – Banca di Credito Finanziario S.p.A., as arranger.

The White & Case team in Milan which advised on the transaction comprised partner Gianluca Fanti, local partner Giuseppe Barra Caracciolo and associates Francesco Scebba and Rocco De Nicola.

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Subsidiaries of foreign investment funds, including foreign sovereign investment funds, may now own a bank in Mexico

In 2014, the Mexican government announced comprehensive reforms of the regulations governing financial institutions. Mexico amended, supplemented and repealed various legal provisions, including amending 34 legal statutes to foster greater competition in the financial and banking system by creating incentives to increase lending, as well as a new mandate for development banks. These reforms sought to strengthen both the stability of financial institutions and the powers of financial authorities in regulatory, monitoring and enforcement matters.

The reforms included amendments clarifying how foreign state-owned entities can legally participate in Mexican financial institutions. They set out the rules that require prior approval from Mexico’s national banking and securities commission—the Comisión Nacional Bancaria y de Valores (CNBV)—before foreign governments may invest in Mexican commercial banks, as a temporary prudential measure, in cases where foreign entities receive financial support or are rescued. The reforms made it clear that this type of intervention should be only through official entities that do not exercise direct authority or control over the Mexican bank. Thus, foreign government participation in a Mexican financial institution must be indirect, without direct control. The reforms also regulated in more detail the procedures for exchanging information with foreign authorities and verification visits.

As a result of the reforms, it became possible for a foreign institution to participate in a Mexican bank as long as the investing entity  does not exercise authority over the bank. Subsidiaries of foreign investment funds, including foreign sovereign investment funds, may now own a bank in Mexico.

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Pacific pioneers: Asian financial institutions enter Mexico

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© 2018 White & Case LLP

Mexico's banking sector, newly open to foreign entities, draws Asia-based financial institutions for multiple reasons.

7
major Asian automobile manufacturers currently have direct subsidiaries in Mexico
Source: Capital IQ

Asian banks were among the first to take advantage of these newly available opportunities for foreign financial institutions in Mexico. They included several banks owned and controlled, including indirectly, by Asian government agencies that established subsidiaries supervised by sovereign wealth fund investment managers.

For example, a subsidiary of the Industrial and Commercial Bank of China (ICBC)—the world's largest bank by total assets—received the first-ever license allowing a foreign sovereign to own a controlling indirect participation in a Mexican banking institution in 2015. Bank of China—the world's fourth-largest bank and the oldest bank in China— followed soon thereafter.

In 2015, Shinhan Bank became the first Korean bank to operate a Mexican subsidiary. Two years later, KEB Hana Bank—the largest financial institution in South Korea— obtained a license to establish a banking subsidiary in Mexico.

Six of the 40 foreign financial institutions that currently have direct subsidiaries in Mexico are Asian headquartered banks, according to Capital IQ.

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Strong and increasing Mexican-Asian commercial ties

Mexico's banking sector attracts Asian financial institutions for multiple reasons.

First, Asia-based banks are well suited to support Asian companies globally, due to cultural and language links and those companies' comfort with their existing banking relationships.

A recent, growing trend has seen Asian manufacturers establishing manufacturing operations in Mexico. Manufacturing in and exporting from Mexico offers competitive advantages, including proximity to the United States—the world's largest consumer market—which currently is accessible from Mexico through the North American Free Trade Agreement (NAFTA). Mexico also participates in a high number of other free trade agreements, by some estimates more than any other country in the world. As Asian multinational companies expand their manufacturing operations in Mexico, many of their Asia-based suppliers and financers are focusing interest on Mexico, too.

During the past few years, a series of legislative and economic reforms have further improved the commercial environment in Mexico, which now ranks among the best countries for economic risk in Latin America.

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According to a Boston Consulting Group study, Mexico's average direct manufacturing costs have been at least 4 percentage points cheaper than China's since 2004. Labor costs in China have risen significantly, while productivity gains in Mexico have offset almost all of the country's wage increases.

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Mexico's manufactured goods exports, which accounted for more than 80 percent of its total goods exports in 2017, "have experienced a robust growth in recent years and are likely to perform well over the long term," according to BMI Research's Mexico Country Risk Report, Q3 2018.

Furthermore, foreign direct investment flows to Mexico from Asian countries are strong and growing. According to fDi Intelligence, from January 2011 to June 2018, Asian companies carried out 597 projects in Mexico worth more than US$42 billion. The top investing countries by number of projects were Japan (US$18.2 billion), South Korea (US$10.6 billion), China (US$5.2 billion) and Hong Kong (US$5.3 billion). The top sectors for Asian foreign direct investment in Mexico by number of projects included automotive components, metals and industrial machinery, and equipment & tools.

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These direct investment ties go both ways. From January 2011 to June 2018, Mexican companies carried out 40 FDI projects worth US$1.98 billion in Asian countries according to fDi Intelligence. The top target countries by number of projects included China, the Philippines, India and South Korea.

Trade ties between Mexico and Asia continue to expand. From 2013 to 2017, Mexico's exports to Asia grew at a compound annual growth rate of 4.67 percent, while its imports from Asia grew at a compound annual growth rate of 5.33 percent, according to the International Trade Centre. In particular, China, which imported US$6.7 billion worth of Mexican-made products in 2017, is now Mexico's fourth-largest trading partner by exports, according to several estimates.

Finally, Mexico is an appealing destination for Asian capital seeking M&A investments. From 2009 through Q1 2018, Asian companies carried out 39 acquisitions in Mexico worth approximately US$4.76 billion. The top target sectors by value in Mexico for Asian companies during this period were energy, mining and utilities, industrials and chemicals, TMT and transportation.

Linking the flow of Asian capital into Mexico's economy has the potential to be a powerful combination: larger than the economic might of the United States, the world's largest economy.

Obtaining the authorization to establish or acquire a bank in Mexico requires creativity, a deep understanding of Mexican regulatory authorities' procedures and a patient investment approach.

Asian financial institutions that include foreign state-owned entities as owners or investors and that would like to take advantage of the new opportunities to expand into Mexico are more likely to find long-term success by preparing to surmount a series of challenges with creativity and insight into Mexican regulators' priorities.

Obtaining the authorization to establish or acquire a bank in Mexico requires creativity, a deep understanding of Mexican regulatory authorities' procedures and a patient investment approach.

 

Set up initial informal meetings with Mexican authorities

To establish a bank in Mexico, the first step for an Asian financial institution is to seek authorization from CNBV, which requires both prior approval of CNBV's Board of Governance and a favorable opinion of Mexico's Central Bank.

Before officially submitting an application for authorization of a foreign-owned financial institution, it can be highly productive to explain the proposed project to the relevant Mexican regulatory authorities and seek their informal feedback. Best practices generally involve working with Mexican regulators to convince them that the new project is supported by reputable investors, has minimal potential liabilities and will likely make a positive net contribution to the Mexican economy.

The path to approval can be complicated if the proposed bank is controlled directly or indirectly by a foreign government—or serves as a vehicle where foreign governments invest reserves—as the filing will likely require significant additional documentation.

Mexican regulatory authorities have discretionary authority to request a variety of information from applicants. Regulators have broad latitude to approve or deny a proposal and theoretically can change the approval process at any time. So it's important to know how to navigate these requests and be proactive. Instead of simply waiting for comments, a bank seeking a new license can work actively with Mexican regulators to clear a mutually agreed-upon path for approval.

Establishing a bank in Mexico can be time-consuming and present varying detailed challenges, depending on a bank's individual circumstances. Overall, a patient, flexible approach and creative problem-solving are most likely to bring effective results. In general, Asian banks find it most useful to follow these steps:

1. Conduct initial informal advance meetings with Mexican authorities

Since the filling will require detailed information and analyses from the applicants, working from the beginning of the project with the relevant authorities to seek their advance feedback can help make the application significantly more efficient.

2. Start planning how to establish operations in Mexico

It's a good idea to begin the planning process even before submitting an application with the Comisión Nacional Bancaria y de Valores (CNBV), Mexico’s national banking and securities commission, since the new bank will have only 180 calendar days to commence operations in Mexico and prepare for an inspection by CNBV after obtaining approval of its deed of incorporation.

3. File an application with CNBV

CNBV, with a favorable opinion of Mexico's Central Bank, must approve the application and can request additional information during the authorization process.

4. Incorporate a Mexican financial institution 

The deed of incorporation, executed with a Mexican notary public, must be filed with CNBV for approval within 90 days after receiving CNBV's official approval.

5. Commence banking operations within 180 days 

This includes compliance with a series of difficult issues, including adjusting complex IT infrastructure systems to Mexican requirements, among other start-up challenges.

6. Prepare for Mexican regulators' scrutiny 

It's important to bear in mind that the new bank will face ongoing compliance with the applicable laws and regulations and inspections from the relevant banking authorities.

FULL MAGAZINE
Pacific pioneers: Asian financial institutions enter Mexico

This publication is provided for your convenience and does not constitute legal advice. This publication is protected by copyright.
© 2018 White & Case LLP

Global law firm White & Case LLP has advised NORD/LB Norddeutsche Landesbank, as mandated lead arranger and lender, on the €100 million financing for the construction of the 174 MWp Don Rodrigo solar park in Spain.

The plant will be built by BayWa r.e. renewable energy GmbH, a subsidiary of BayWa AG, and is expected to be commissioned at the end of 2018. It is being built in an area covering around 265 hectares near Seville in southern Spain and will generate approximately 300 GWh of solar power annually.

"White & Case has advised on one of the first solar projects of this size in Europe to be realized without state subsidies, and has been made possible by a 15-year Power Purchase Agreement with Norwegian energy group Statkraft – a the first of its kind in Spain," said White & Case partner Florian Degenhardt, who led the Firm's deal team. "At the same time, such long term PPAs pave the way for further financings of subsidy-free renewable energy projects in Spain."

The White & Case team in Hamburg which advised on the transaction was led by partner Florian Degenhardt and included counsel Beate Treibmann and associate Max Sergelius.

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Global law firm White & Case LLP has advised a bank syndicate on the amendment of the existing senior secured credit lines provided to Pfleiderer Group S.A. and PCF GmbH (Pfleiderer Group).

Goldman Sachs Bank USA acted as lead arranger and bookrunner, Deutsche Bank Luxembourg S.A. acted as facility agent, and Wilmington Trust (London) Limited acted as a security agent.

The total amount of Senior Secured Loan B was increased from €350 million to €445 million, with the additional amount of up to €95 million being used for the implementation of the planned share buyback programme, and to cover the associated transaction costs. In addition, the pricing of the credit facilities was adjusted.

Listed on the Warsaw Stock Exchange, Pfleiderer Group is a leading wood panel manufacturer in Europe with annual sales of approximately €1 billion and around 3,600 employees. It operates nine production sites in Germany and Poland as well as sales branches in England, the Netherlands, Switzerland, Austria, Romania and France.

The White & Case team in Frankfurt which advised on the transaction was led by partner Vanessa Schuermann and included local partners Sébastien Seele and Florian Ziegler and associates Daniel Hobbs and Daniel Rogits.

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Global law firm White & Case LLP has advised Open Fiber S.p.A., an Italian company which installs, supplies and services fibre optic high speed electronic networks across Italy, on its €3.5 billion financing.

The deal is the largest ever financing for a fibre optic network in the EMEA region.

BNP Paribas and Société Générale e UniCredit acted as underwriters, global coordinators, global bookrunners and initial mandated lead arrangers, and Cassa Depositi e Prestiti, the European Investment Bank, Banca IMI, Banco BPM, MPS Capital Services and UBI Banca, Credit Agricole, ING, Caixa Bank, MUFG Bank, Natwest and Banco Santander acted as lenders. Unicredit also acted as agent.

The White & Case team which advised on the transaction comprised partners Michael Immordino (Milan & London), Iacopo Canino and Ferigo Foscari and associates Stefano Bellani and Adriana Tisi (all Milan).

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Global law firm White & Case LLP has advised Intesa Sanpaolo, Mediobanca, UniCredit, Banca Nazionale del Lavoro and Banca IMI, as Agents, on a €350 million term and revolving credit facilities financing for Italian fashion company Valentino S.p.A.

The White & Case team in Milan which advised on the transaction comprised partners Iacopo Canino and Gianluca Fanti, associate Bianca Caruso and lawyer Valerio Marotta.

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Global law firm White & Case LLP has advised a group of institutional investors led and represented by MEAG MUNICH ERGO AssetManagement GmbH, the central asset manager of insurers Munich Re and ERGO, and Deutsche Bank Luxembourg S.A. as financing agent and security agent, on the financing of the Norwegian wind farm Eikeland-Steinsland and the structuring of the finance solution.

MEAG and Luxcara, one of the leading European asset managers for renewable energy investments, jointly initiated and structured the financing. The wind farm belongs to the Bjerkreim cluster, which is comprised of three neighbouring wind farms (Eikeland-Steinsland, Gravdal und Skinansfjellet) in south west Norway.

The projects exceed an investment volume of €400 million and will be built and operated over the long term by Luxcara. The financing is based on a long term power purchase agreement (PPA) with Facebook. The commissioning of the entire Bjerkreim cluster, with a capacity of 294 MW and a projected contribution of more than 1,000,000 megawatt hours of clean renewable energy to the Nordic grid each year, is planned for the fourth quarter of 2019.

The White & Case team in Hamburg which advised on the transaction was led by partner Florian Degenhardt and included counsel Beate Treibmann and Alexander Born, local partner Matthias Grigoleit and associates Max Sergelius and Lisa Kirchner.

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Smita Vassan is an associate in the Energy, Infrastructure and Project Finance Group based in Johannesburg. She specialises in project development and finance, general bank finance and construction in South Africa and Africa, across multiple industry sectors with particular focus on renewable energy.

Smita co-authored "The State of Energy in Africa" in Engineering News, 23 November 2016.

Prior to joining White & Case, Smita was an associate at leading South African law firm.

Ginevra Marois is an associate in the Global Bank Finance Practice based in Paris.

Ginevra advise financial institutions and borrowers in domestic and cross-border transactions. She has a particular focus on corporate financings, leverage financings and real estate financings.

Global law firm White & Case LLP has advised Amplifon S.p.A., a global leader in the hearing systems industry, on its €528 million term financing for the acquisition of GAES Group, the largest privately-owned specialty hearing care retailer worldwide, with a leadership positioning in Spain and presence in Portugal and a number of Latin American countries.

The White & Case team which advised on the transaction comprised partners Michael Immordino (London & Milan), Ferigo Foscari and Alessandro Nolet, associate Stefano Bellani and lawyer Charles English (all Milan).

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Lawrence Rufrano is a fintech advisor at White & Case LLP.

Lawrence has significant expertise serving as a fintech advisor to a full spectrum of clients ranging from global financial institutions to startup companies. His advice includes counseling clients on strategic technology transactions, mergers and acquisitions, IPOs and regulatory matters. Additionally, Lawrence advises fintech companies throughout the stages of their growth cycle. He also works with venture capital and private equity funds focused on investing in fintech companies.

Lawrence also serves as a fintech advisor and executive in residence at Plug and Play, the Silicon Valley incubator and venture capital investment firm, and is a visiting scholar at the Advanced Financial Technology Lab at Stanford University School of Engineering. He was previously a senior financial analyst at the Federal Reserve Board where he focused primarily on consumer assets.

Gordon Mak is a Counsel in the Firm's Bank Finance group in New York. Gordon represents lending institutions, private equity sponsors and corporate borrowers in a variety of domestic and cross-border financing transactions. Gordon's practice focuses primarily on advising lead arrangers, agents and private equity sponsors in connection with leveraged acquisitions.

Prior to joining White & Case, Gordon was a Counsel at another leading international law firm.