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February 9, 2010 |
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| October 21, 2009 |
By: Review staff |
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Laurie Green and Kara MacCullough
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Dealmakers: Attorneys Kara MacCullough and Laurie Green
The Deal: The two Holland & Knight partners helped Miami transportation and logistics company Ryder System structure the purchase of $100 million worth of its debt. The deal was completed Sept. 9.
Details: Ryder System, which was seeking to reduce its interest expenses, offered to purchase $50 million worth of notes with May 2011 and April 2011 maturity dates, and another $50 million of notes due April 2010.
The May 2011 notes had a 5.95 percent interest rate, the April 2011 notes had a 5 percent interest rate and the April 2010 notes had a 4.625 percent interest rate.
Ryder’s first priority was to buy the outstanding 2011 notes due to their higher interest rates, giving preference to the May 2011 issue.
Because of heavy purchaser response to the May 2011 notes, none of the April 2011 notes were purchased. Ryder also purchased $50 million of the April 2010 notes.
Nearly $289 million in notes were tendered. Because it was oversubscribed, Ryder paid debt holders on a pro rata basis. Ryder purchased 55 percent of May 2011 notes tendered and 49 percent of the April 2010 notes tendered.
MacCullough said the “waterfall” debt tender offer was difficult to structure because of complex securities laws. In a waterfall tender offer, a company establishes the priority and limits for each series of notes it intends to purchase.
A waterfall tender offer also helps companies establish up front how much they will have to spend.
MacCullough said they had to move quickly because of the volatile capital markets. She said companies offer to purchase notes at a premium based on the price set by financial markets. If the market shifts quickly, it can become less advantageous for note holders to tender their notes. If the company has to change the offer because of the market shift, then the offer has to be open for another 10 days.
Quote: “Because the markets are moving, you want to go ahead and get your offer out there so you can buy it at the best price for the company,” MacCullough said.
Background: MacCullough and Green have been with Holland & Knight since January 2007. Associate Alexandra Lumpkin helped with the debt tender offer. Flora Perez, Ryder’s associate general counsel, also worked the offer.
— Jordana Mishory
Broker helps online unit of CBS find new home
Dealmaker: Jim Cahlin
The Deal: Cahlin, a broker with Cushman & Wakefield, represented the online division of CBS as it signed a long-term office lease for 34,622 square feet at the 1401 Crown Center building in Fort Lauderdale.
Cahlin declined to disclose the financial terms of the CBS lease, but office rents averaged $27.87 per square foot in Fort Lauderdale during the third quarter of 2009, according to CoStar Group. Using that average, a 10-year lease would be valued at about $9.6 million.
Details: After a year-and-a-half search for a new South Florida home, CBS decided the best location for the Internet operation was only several blocks away from its current office at 2200 W. Cypress Creek Road.
CBS Interactive, which comprises software engineers and Web content staffers, will move into the second floor of the building in January 2010.
The 1401 Crown Center building is one of six on the 23-acre Crown Center campus. Landlord Midgard and Metro 1 Properties, a firm that oversees “green” projects, renovated the 1401 to meet standards for silver Leadership in Energy and Environmental Design certification.
A second floor was added to expand the building to about 76,700 square feet. Interior build-out should be finished in time for CBS to move in January.
“We evaluated the situation in their current building and analyzed the marketplace before narrowing it down to a building nearby,” Cahlin said. “There were three major components to CBS’s decision: minimal employee disruption during the move, more efficiency with the space and an LEED-certified building.”
While the move will reduce the overall square footage of CBS’s space from about 40,000 square feet to 34,622 square feet, the company’s usable space will remain the same, Cahlin said.
“This is not a downsizing,” he said. “They gained more efficiency by moving from two floors to one full floor.”
Background: Cahlin is a broker in the Fort Lauderdale office of Cushman & Wakefield.
Ronald Schagrin of Commercial Property Realty Group represented Midgard in the deal.
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