First high-yield offering by South African bidder goes to Paul Weiss

Paul Weiss Rifkind Wharton & Garrison has scooped the first high-yield bond offering by a South African issuer in a deal worth €175m (£116.5m).

The US firm acted for new client Foodcorp, the South African manufacturer of branded and private label food products, which sold E175m of notes, maturing in 2012.

Paul Weiss partner Mark Bergman, who led the team advising Foodcorp, said the landmark deal raised both novel regulatory and structuring issues.

"Foodcorp had to get approval from the Reserve Bank of South Africa and had to work with local banks whose debt was being refinanced, as well as with new lenders on timing and security issues. High yield through the capital markets has the potential to be an extremely attractive alternative financing source for South African companies."

Shearman & Sterling, led by partner Ward McKimm, represented the deal's underwriter Citigroup, while South African law firm Werksmans acted as local counsel.

Foodcorp was created through the largest leveraged buyout (LBO) in South Africa by a Black Empowerment Entity (BEE) in the food sector and the second-largest BEE-led LBO in South Africa.