North America Loan: Otis Worldwide’s €1.65bn bridge loan

IFR Awards 2022
2 min read
Rhys Adams

Pushing the right buttons
Elevator and escalator manufacturer Otis Worldwide worked with sole underwriter Morgan Stanley to steer a course through Spanish acquisition finance requirements to fund its purchase of the remaining 49.99% of Spanish elevator company Zardoya Otis that it did not already own.

In September 2021, Otis tapped Morgan Stanley to provide €1.65bn in bridge financing in a deal that ultimately provided its US-based relationship banks an opportunity to benefit from its cross-border ambitions.

Beyond typical certainty-of-funds requirements that could have been satisfied with the bridge loan, regulations in Spain also dictate that banks guarantee the credit agreement, similar to a letter of credit, said Anish Shah, global head of acquisition finance at Morgan Stanley.

“That structure is incredibly complex. You have to figure out a way for the banks not to have to duplicate their capital, and it requires a lot of coordination with the Spanish takeover authority,” said Shah.

Increasing the complexity of the exercise was Otis’ determination to include its US-based lending partners in the transaction. Otis wanted to provide its relationship banks with an opportunity to be part of the bridge and bond takeout, given the rarity of this type of deal, and that objective precluded simply syndicating the loan to Spanish lenders.

That aim required one-on-one calls to each member of the US syndicate to explain the complexities of the unfamiliar financing structure, and roughly double the expected time for syndication. It also needed the bridge and guarantee facilities to be syndicated proportionately to avoid a mismatch of the bridge and guarantee providers.

The structuring required a high level of coordination between Morgan Stanley’s US and Spain-based teams.

“That we were able to structure something in a confidential way that accomplished this incredibly important strategic objective of [Otis Worldwide’s] really speaks to our practice – the creativity of structuring, the nuances, and being able to customise financing packages,” said Shah.

Morgan Stanley was sole underwriter, lead arranger and bookrunner for both the unsecured €1.65bn 364-day bridge loan and the €1.65bn CNMV guarantee that was necessary to satisfy Spanish regulatory requirements. Opal Spanish Holdings was the borrowing entity.

Morgan Stanley was also exclusive financial adviser to Otis Worldwide for the transaction and was an active bookrunner on the €1.6bn bond offering Otis Worldwide completed in November 2021. That bond was used to refinance the bridge loan.

Although the bridge financing was placed in September 2021, the underlying acquisition completed in February 2022, making the loan eligible for consideration for IFR's 2022 awards.

To see the digital version of this report, please click here

To purchase printed copies or a PDF of this report, please email