Synovus – Financing Issues Resolved for Employee Stock Ownership Plan (ESOP)

Challenge

Georgia-based Synovus is a financial services company that operates in several Southeast states and is traded on the New York Stock Exchange. Arnall Golden Gregory represented Synovus in connection with a $45 million loan to finance the sale of military contractor to an employee stock ownership plan (ESOP).

Approach

The financing strategy for the ESOP was complex, incorporating separate credit facilities to fund the redemption of all outstanding shares of the company and subsequent issuance of shares to the ESOP. In addition, a working capital line-of-credit was established for the company, and the mortgage on the company’s primary facility owned by an affiliated real estate holding company was refinanced. Arnall Golden Gregory attorneys advised on real estate lending issues implicated by the mortgage loan, regulatory matters connected to creation of the ESOP, the proposed management incentive plan and IRC 409(p) compliance, and Federal Assignment of Claims Act matters related to the collateral assignment of the company’s government contracts to the bank.

Result

The successful completion of this complicated loan transaction is further evidence of Synovus’s commitment to helping small businesses prosper, and of Arnall Golden Gregory’s commitment to using its expertise to help clients achieve their goals.