FL-2022-000014 - [2025] EWHC 2631 (Ch)

On 24 November 2020 Mr Greensill agreed with Mr Degen that the Greensill Group would buy back $70 million of notes in the Fairymead Note Programme due to mature on 15 December 2020.

This was settled on 25 November 2020. These trades were booked as secondary trades, with the trade date on 24 November 2020 and settlement on 25 November 2020.

There was also a transaction for the buyback and re-issue of the Fairymead Notes. An email from Ms Just to Mr Lane of 4 December 2020 stated:

“As mentioned earlier today, we spoke to Katerra’s CFO:

1.

They do want to sell receivables on the 15th of December. They believe they will have sufficient AR volume to do a full roll and have requested that we shorten the buffer period to 0, so all the receivables become due on the 15th of January

a.

They added that our facility should be terminated before the 15th of January

2.

They explained that in addition to the USD50mm note (for which we released our real estate security this past weekend), Softbank is going to inject USD150mm of equity into Katerra by the end of December

a.

The timing of this injection is what is driving their willingness to roll receivables until January

3.

We asked what’s the status of the pay off and whether Kirkland/Katerra would be sending a revised pay off letter (we didn’t mention any %, and instead asked to see what they said). They didn’t mention any specific % on the call and said they were due to speak to Softbank counsel to gather information later today

a.

Right now we just got the attached email from the CFO saying that Kirkland/Katerra will not be sending us any pay off letter?? and that the termination will be handled entirely between Greensill and Softbank…. ??? I don’t think this makes sense at all. For a termination to occur, we need both parties of the agreement, lender and borrower to sign the termination letter particularly if it is committed.”

An email sent from Ms Just to Mr Bronowski and others on the Greensill Group “Watchlist Committee” on 17 December 2020 sought approval for a portion of existing maturity dates in “the Katerra facility” (i.e. the RPA). It stated:

“Katerra is in the process of restructuring and this exercise is likely to be finalized in early 01 2021. For conservative measures, Greensill and the company would prefer that the notes maturing in January and February next year are pushed to March.

There are currently 70 notes maturing in January and February for an aggregate maturity amount of USD363mm (see spreadsheet attached). We request approval to extinguish those notes and issue a new set of notes that mature on 15-Mar-2021. In order to do this, Katerra would submit a request to update the buffer period of the related purchased receivables. The outstanding facility amount will remain unchanged. We are in coordination with Trading, Operations and Legal, and the plan is to bring this to completion before 31-December-2020.”

Ms Just asked Mr Jenesky to agree this proposal with CSAM by email on the same day:

“Ivan - Katerra is asking to amend the buffer. You need to tell CS this is really operational. If we could change existing notes, we would. But we cant. So we need to cancel and reissue. There is no exposure increase other than intraday.”

On 18 December 2020 GL entered into two Side Letters with Katerra Delaware, amending and restating the “Buffer Period” applicable to specific Purchased Receivables.

On 22 December 2020 68 outstanding notes with an aggregate value of approximately $363 million were redeemed early and replaced by new notes with longer maturity dates. This was a consequence of the modifications agreed between the Greensill Group and Katerra Delaware to the “Buffer Period” applicable to the Purchased Receivables. It also meant that the Greensill Group recovered the $70 million it had used to fund the repurchase of Fairymead Notes in November 2020. The effect was that the SCF Subfund held a beneficial interest in notes with an aggregate value of $439,999,710, with the primary maturity date being 15 March 2021 and the balance maturing on 17 May 2021.