Best Acquisition / Leveraged Finance Lawyers in Bilbao

About Acquisition / Leveraged Finance Law in Bilbao, Spain

Acquisition and leveraged finance matters in Bilbao are part of the wider Spanish legal and regulatory framework, with local nuances tied to the Basque Country and Bizkaia. Leveraged finance commonly involves financing the purchase of a company or its assets using debt secured on those same assets. Legal work covers negotiating and documenting facility agreements, security packages, intercreditor arrangements, guarantees, regulatory clearances and enforcement mechanics. Bilbao market participants include Spanish and international banks, alternative lenders, private equity sponsors and local corporate borrowers. Local counsel is routinely engaged to ensure that security over Spanish assets is validly created, registered and enforceable under Spanish law and to advise on Basque tax and administrative particularities.

Why You May Need a Lawyer

Leveraged acquisitions typically raise complex legal issues where specialist advice reduces execution risk and protects value. Common situations where lawyers are needed include:

- Structuring the financing to fit the tax, corporate and insolvency framework in Spain and the Basque Country.

- Drafting and negotiating loan agreements, bond documents, intercreditor agreements and security documents.

- Conducting legal due diligence on the target - corporate, regulatory, tax, employment, real estate and contractual risks.

- Creating and perfecting security - pledges of shares, assignments of receivables, mortgages over real estate, charges over bank accounts and registration with the appropriate registries.

- Navigating regulatory approvals for regulated sectors, or merger control filings with national or EU authorities.

- Advising on restrictions such as distributions, related-party transactions, financial assistance rules, and restructuring options if financial distress arises.

- Enforcing creditor rights and security in insolvency or contested enforcement scenarios.

Local Laws Overview

Key legal regimes and practical points relevant to acquisition and leveraged finance in Bilbao include:

- Corporate Law: Spanish company law - Ley de Sociedades de Capital - governs share transfers, shareholder rights, distributions and capital maintenance rules. These rules can affect permitted upstream guarantees and dividend policies post-acquisition.

- Contract Law: General contract principles and commercial practice apply to finance documents. Choice of law and jurisdiction clauses are important - lenders often use English law for facility agreements while taking Spanish law security over Spanish assets.

- Security and Collateral: Spanish law provides several security mechanisms. Common forms are share pledges (prenda sobre acciones), assignments of receivables (cesión de créditos), mortgages over real estate (hipoteca), and pledges over movables. Many security interests must be perfected by registration in the Commercial Registry, Property Registry or Registry of Movable Property depending on the asset type.

- Registration and Perfection: Perfection formalities are critical for enforceability and priority. For example, mortgages over land must be notarized and registered at the Registro de la Propiedad. Pledges over shares in a sociedad limitada or sociedad anónima usually require entry in the Registro Mercantil and compliance with corporate formalities.

- Insolvency Law: Spain's insolvency regime - Ley Concursal - sets out creditor ranking, avoidance actions and reorganization procedures. Spanish law contains strict rules on fraudulent conveyances and preferences, and enforcement in insolvency often requires quick action and carefully structured security.

- Tax Considerations: The Basque Country has tax particularities under the economic agreements that may affect withholding, stamp duty and certain regional taxes. Corporate income tax, VAT and transfer tax issues should be checked early, including potential tax at the level of the target and implications of debt push-down structures.

- Regulatory and Competition Rules: Transactions in regulated sectors such as banking, insurance, energy, transport and defense may require regulatory approvals. Mergers that meet thresholds require notification to national competition authorities or the European Commission.

- Local Courts and Enforcement: Enforcement and insolvency proceedings are handled through Mercantile Courts and local civil courts. Bilbao falls within the jurisdictional structures of the Basque judicial system and the Audiencia Provincial de Bizkaia for appeals.

Frequently Asked Questions

What is leveraged finance and how does it differ from other acquisition finance?

Leveraged finance is the use of significant amounts of debt to fund an acquisition, often secured against the target's assets and cashflows. It differs from traditional corporate lending by its higher leverage ratios, stronger emphasis on security packages, intercreditor arrangements and often more complex covenant regimes and restructuring provisions tailored to sponsor-led deals.

Can international lenders use English law documents while taking security over Spanish assets?

Yes. It is common to use English law for the main finance documents while having Spanish law side-letters or security documents governing the creation and perfection of security over Spanish assets. Local counsel should confirm that the Spanish-form security documents meet formal requirements for validity and registration.

What are the common forms of security over assets in Spain?

Typical security includes mortgages over real estate, pledges of shares, pledges of movables, assignments of receivables and contractual rights, and charges over bank accounts. The precise form and registry for perfection depend on the asset type and corporate form of the borrower or target.

How do I perfect a pledge over shares in a Spanish company?

Formal steps include executing the pledge agreement in compliance with company statutes, recording the pledge in the corporate books, and registering the pledge at the Registro Mercantil if applicable. Share classes, transfer restrictions and the company type affect the precise formalities.

What rights do creditors have in a Spanish insolvency?

Creditors have rights to file claims, vote on restructuring plans and enforce secured interests subject to insolvency avoidance rules. Secured creditors' rights depend on proper perfection of security. Unsecured creditors rank below secured and privileged creditors, and insolvency may trigger clawback risks for recent transactions.

Are there restrictions on a company providing guarantees or financing for the purchase of its own shares?

Spanish company law contains capital maintenance and distribution rules that can restrict financial assistance. Guarantees and upstream loans can be limited by shareholder equity and distribution rules, and may be subject to formalities to avoid rendering them void in insolvency.

What tax issues should I consider in a leveraged acquisition in Bilbao?

Key tax considerations include transactional VAT or transfer taxes, potential stamp duties on security, withholding taxes on cross-border payments, deductibility of interest, thin capitalization rules and local Basque tax regimes. Early tax structuring and local tax advice in Bizkaia are advisable.

How long does it take to close a typical leveraged acquisition in Spain?

Timelines vary. Legal due diligence commonly takes 2 to 6 weeks. Negotiation and documentation can take 4 to 12 weeks depending on complexity. Perfection and registration of security add time, especially where notary deeds or property registrations are required. Complex cross-border or regulatory clearances can lengthen the process.

Can lenders enforce security quickly in Spain?

Enforcement speed depends on the type of security and whether the security was properly perfected. Real estate mortgage foreclosure follows set procedural rules and can be efficient when properly structured. Enforcing pledges over movables or shares may require court action if not agreed otherwise. Parties can include agreed enforcement mechanisms in the finance documentation subject to Spanish formalities and public order rules.

How should I choose legal counsel for an acquisition financed with leverage in Bilbao?

Choose counsel with demonstrable experience in leveraged transactions, local registration and enforcement practice, and cross-border finance. Look for firms or lawyers who coordinate well with foreign counsel, understand Basque tax and administrative peculiarities and have litigation capacity for enforcement or insolvency matters.

Additional Resources

Useful public bodies and organizations to consult or research include:

- Registro Mercantil - for company incorporations, registers of charges and filings.

- Registro de la Propiedad - for property and mortgage registrations.

- Registro de Bienes Muebles - for registration of certain movable assets and pledges.

- Ministerio de Justicia - for national legal framework and registries.

- Banco de España - for banking regulation and supervised institutions.

- Comisión Nacional del Mercado de Valores - for securities and public market rules.

- Hacienda Foral de Bizkaia - for local tax administration and Basque-specific tax matters.

- Mercantile Courts in Bilbao - for insolvency filings and commercial litigation.

- Colegio de Abogados de Bizkaia - for local lawyer directories and professional resources.

- Cámara de Comercio de Bilbao - for business support and local market information.

Next Steps

If you need legal assistance for an acquisition or leveraged finance transaction in Bilbao, consider the following practical steps:

- Arrange an initial consultation with a lawyer experienced in acquisitions and leveraged finance. Prepare a short briefing of the proposed transaction, including target details, proposed financing and timeline.

- Execute a confidentiality agreement before sharing sensitive documents. Provide a preliminary data room or document summary to enable an early assessment.

- Instruct local counsel to carry out scoped legal due diligence - corporate, contracts, employment, property, tax, regulatory and litigation searches. Obtain a diligence report that highlights deal breakers and required consents.

- Work with advisors to produce a financing term sheet setting out principal economics, security to be taken and key covenants. Use the term sheet to align expectations between the borrower, sponsor and lenders.

- Engage local counsel to draft or review Spanish-form security documents, confirm registration steps and prepare any necessary corporate approvals and board resolutions.

- Plan for tax and regulatory approvals early. Ask your lawyer to coordinate with local tax advisers and regulatory counsel to avoid last-minute surprises.

- Agree a project plan for closing and post-closing items, including registration timelines, filing obligations and any required filings with Basque authorities.

- Confirm fee arrangements and engagement terms with your counsel. Typical fee models include hourly billing, capped fees for defined workstreams and hybrid arrangements that may include success fees for complex transactions.

Early engagement of experienced Bilbao-based counsel will reduce execution risk and help ensure that security, registration and enforcement positions are solid from the outset. If you would like help finding or evaluating a Bilbao lawyer, prepare a concise summary of your transaction and the key legal questions you face before your first meeting.