Shearman And Sterling

News Aug 26, 2020

Carlson Travel, Inc.’s Restructuring

Shearman & Sterling advised Carlson Travel, Inc. (CTI) on its restructuring of existing indebtedness, which included (i) an exchange offer, (ii) a consent solicitation, (iii) an issuance of rights offering units consisting of new notes and shares of common equity of a newly-created holding company, (iv) an equity contribution by CTI’s principal shareholder and (v) an amendment and restatement of CTI’s revolving credit facility.

Pursuant to the exchange offer, CTI exchanged all or a portion of its outstanding Senior Secured Floating Rate Notes, 6¾% Senior Secured Notes and 91/2% Senior Notes (the “Existing Notes”) for new Senior Secured Floating Rate Notes due 2025, Senior Secured 6.75% Notes due 2025 and Senior Secured 11.50% Notes due 2026, respectively. As part of the consent solicitation, CTI amended the Existing Notes still outstanding and the indenture governing such Existing Notes to, among other things, eliminate substantially all of the restrictive covenants and events of default. CTI also conducted a rights offering, pursuant to which it issued $125 million of 8.50% Senior Secured Priming Notes and shares representing 10% of the common equity of a newly-created holding company of CTI. As party of the restructuring, CTI's principal shareholder, Carlson, Inc., made an equity contribution of $125 million. Finally, CTI’s revolving credit facility was amended and restated to, among other things, extend its maturity date and amend the restrictive covenants and financial covenants contained therein.

CTI is one of the world’s largest business travel management companies, as measured by traffic and revenue in 2019. CTI provides travel booking and servicing across a wide range of service channels, including online, mobile, email, phone and text messaging. CTI focuses on its “Business to Business for Employees” service model, which addresses both the needs of the client—the business that engages CTI’s services—and the traveller—the employee of such business—before, during and after travel.

The Shearman & Sterling team below also included associate Harekrishna Ashar.

The Team