Covenant-Lite Loans: Recent Trends for U.S. Middle Markets and European Markets

Description

Borrower-friendly covenant-lite loans reemerged in the syndicated loan market a couple of years ago after disappearing during the recession. Very recently, covenant-lite loan terms emerged in U.S. middle markets where there has been a convergence in loan terms between high-cap and middle markets.

While companies that are not in the higher end of the middle market may not see the covenant-lite deals of larger organizations, lenders will often offer more loosely structured or fewer covenants than in the past as they try to compete for quality deals. 

The usually conservative European leveraged loan market has only recently begun to include looser covenants in larger acquisitions and refinancing deals. While not quite U.S. style cov-lite loan structures, much of this new trend is adopted from the U.S. credit markets.

Listen as our authoritative panel of commercial finance attorneys analyzes the emergence of covenant-lite loans, typical provisions and elements, and the pros and cons of cov-lite loans for both borrowers and lenders. The panel will discuss the migration of cov-lite loans to the U.S. middle markets and look at the emergence of cov-lite loan terms in the usually conservative European leveraged loan market.