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

Analyzing Elements of Cov-Lite Loans for Borrowers and Lenders

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Thursday, August 28, 2014

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Course Materials

This CLE course will provide banking and commercial finance counsel with an analysis of covenant-lite loans, typical provisions, key elements, how they compare to earlier terms, as well as market trends for U.S. middle market deals and European deals.  

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.

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Outline

  1. Analysis of current market conditions favoring covenant-lite loans
  2. Elements of covenant-lite loans in 2014
  3. Covenant-lite terms for U.S. middle markets
  4. Covenant-lite loans in the European leveraged loan market

Benefits

The panel will review these and other key questions:

  • How do current cov-lite terms differ from those in past years?
  • What elements of cov-lite loans have emerged in middle market transactions?
  • What elements of cov-lite loans are emerging in the European leveraged loan market?

Faculty

Stephanie S. McCann
Stephanie S. McCann
Partner
McDermott Will & Emery

Ms. McCann focuses her practice on debt financing transactions. She represents private equity groups, commercial...  |  Read More

George M. Houhanisin
George M. Houhanisin
Atty
McDermott Will & Emery

Mr. Houhanisin focuses his practice on corporate finance, corporate restructurings, and general commercial...  |  Read More

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