Lenders’ freedom to transfer their participations in large leveraged loans has been gradually eroded by developments introduced through the last few credit cycles.

This market wrap covers the development of the transferability clause from the early 2000s through to post-crisis developments.

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The recent up-tick in covenant lite financings in the European leveraged loan markets has caused some in the investor community to express concern about what impact it will have when the debtor becomes distressed. This article examines the causes of the recent trend, and dispels some of the myths about covenant lite in the context of a restructuring.
Continue Reading The Resurgence of Covenant Lite, and What it Means for the Restructuring Market