Experience

Office Depot de Mexico in $350 Million Global Bond Offering

September 20, 2013

Cleary Gottlieb represented Credit Suisse Securities (USA), BBVA Securities, CorpBanca and Banco Latinoamericano de Comercio Exterior, as initial purchasers in a global bond offering by Office Depot de Mexico. The transaction consisted of an offering of $350 million 6.875% senior notes due 2020 by Office Depot de Mexico and guaranteed by several subsidiaries of Office Depot de Mexico located in Mexico and Colombia. The proceeds of the offering were used to partially repay a dual-currency senior secured bridge loan to Grupo Gigante, which financed Grupo Gigante’s acquisition of a 50% interest in Office Depot de Mexico. Cleary Gottlieb previously advised Credit Suisse and BBVA Bancomer in connection with the bridge loan. The bond offering was conducted as a private placement under Rule 144A of the Securities Act of 1933 and outside of the Unites States in reliance on Regulation S. The transaction launched on September 3 and closed on September 20.

The transaction is the first bond offering in Mexico outside of the restructuring context to include a covenant in the indenture requiring the issuer to assign any intercompany indebtedness to a Mexican trust. In the event of any restructuring pursuant to a Mexican concurso mercantil or similar bankruptcy proceeding, the trust will empower the trustee to vote such intercompany indebtedness in a manner consistent with the vote of the note holders. This covenant has been increasingly sought by investors following decisions in Mexico that allowed intercompany debt to be voted in concurso mercantil proceedings.

Office Depot de Mexico has over 250 locations throughout Mexico, Central America and Colombia, and is the largest office supply chain store in the region. It is wholly owned by Grupo Gigante, a Mexican retail holding company engaged in the operation of restaurants (Toks, Panda Express, CupStop), real estate businesses (Grupo Gigante Inmobiliario) and retail stores (The Home Store and Petco).