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Merchants Automotive Group

Hooksett, NH

Overview

Merchants Automotive Group (MAG), one of the nation’s largest commercial vehicle lessors and fleet managers, sought Husch Blackwell’s counsel in a syndicated credit facility and sale of senior and subordinated private placement notes.

Challenges

A transaction as large and sophisticated as this one was faces multiple challenges, and in this case there were three principle challenges that needed to be tackled. First, MAG operates a complex business, and all of the parties at the deal table needed to understand those complexities in order to get the deal done. Our team educated both counsel to the bank group and counsel to the purchaser of the private placement notes on the different groups or classes of vehicle assets and how certain of these vehicle assets are reflected on the company’s balance sheet.

Second, the presence of multiple constituencies at the deal table always presents complications. Our team had to strike the right balance in negotiations with both the bank syndicate as well as with the purchaser of the senior and subordinated private placement notes. Third, our team needed to establish the framework for future securitizations. In addition to crafting the corporate and intercompany loan documentation necessary for a securitization, both the bank documents and private placement documents needed to expressly permit a titling trust to purchase and lease vehicles and to subsequently securitize these assets.

Solution

In close coordination with the client’s finance team, we quickly learned everything we could about the client’s business. Second, we kept wide open lines of communication, both internally and externally. Partners, associates and paralegals at Husch Blackwell all communicated regularly with the client. In addition, everyone at all levels from each law firm representing a client in this transaction was in regular communication with one another. Third, we internally allocated defined aspects of the transactions among members of the Husch Blackwell team such that everyone on the team was incorporating securitization provisions into the documents for which they were responsible.

Result

In the aggregate, the transactions made available to MAG more than $1 billion in loans and other financial accommodations. Bank of America served as agent bank and joint lead arranger for a 12-bank syndicate, and Teachers Insurance and Annuity Association purchased the private placement notes.