Cleary Gottlieb advised longtime client The Interpublic Group of Companies on its innovative $750 million financing arranged by Morgan Stanley. Interpublic was looking to replace a traditional syndicated revolving bank credit facility, and it wanted to have the advantages of a committed revolver — ready access to funds as needed — without the burdens of complying with bank covenants.
To this end, the new financing uses a special-purpose vehicle called ELF Special Financing Ltd. (“ELF” stands for Enhanced Liquidity Facility.) ELF issued notes in a 144A placement, invested the proceeds in a AAA-rated money market fund, and provided Interpublic with a $750 million credit facility on which Interpublic can draw at any time. The credit facility has extremely limited covenants and conditions precedent to drawing.