Double-Dip Financings: The Next Wave in European Liability Management?
A "double-dip" structure is considered a way to allow some creditors to have multiple claims against key obligors arising out of the same underlying transactions. These additional claims could improve their position relative to other creditors in a bankruptcy or liquidation.
Although historically the double-dip was considered a potential argument that could be used in certain preexisting debt structures, recent liability management transactions in the United States and Europe have deliberately built double-dips into new debt structures with the goal of maximizing recovery in a downside scenario.
This White Paper identifies the key characteristics of a double-dip financing and provides detailed examinations of two recent case studies. It considers potential obstacles to double-dips appearing in Europe and provides guidance on potential areas for expansion.
