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Hello,
Looking for offers for:
covenantlite.co.uk
From Wikipedia: Cov-lite ("covenant lite or covenant light") is financial jargon for loan agreements which do not contain the usual protective covenants for the benefit of the lending party. Although traditionally banks have insisted on a wide range of covenants which allow them to intervene if the financial position of the borrower or the value of underlying assets deteriorates, around 2006 the increasing strength of private equity firms and the decreasing opportunities for traditional corporate loans made by banks fuelled something of a "race to the bottom" with syndicates of banks competing with each other to essentially offer ever less invasive terms to borrowers in relation to leveraged buy-outs.
Cov-lite lending is seen as more risky because it removes the early warning signs lenders would otherwise receive through traditional covenants. Against this, it has been countered that cov-lite loans simply reflected changes in bargaining power between borrowers and lenders, and followed from the increased sophistication in the loans market where risk is quickly dispersed through syndication or credit derivatives.
Looking for offers for:
covenantlite.co.uk
From Wikipedia: Cov-lite ("covenant lite or covenant light") is financial jargon for loan agreements which do not contain the usual protective covenants for the benefit of the lending party. Although traditionally banks have insisted on a wide range of covenants which allow them to intervene if the financial position of the borrower or the value of underlying assets deteriorates, around 2006 the increasing strength of private equity firms and the decreasing opportunities for traditional corporate loans made by banks fuelled something of a "race to the bottom" with syndicates of banks competing with each other to essentially offer ever less invasive terms to borrowers in relation to leveraged buy-outs.
Cov-lite lending is seen as more risky because it removes the early warning signs lenders would otherwise receive through traditional covenants. Against this, it has been countered that cov-lite loans simply reflected changes in bargaining power between borrowers and lenders, and followed from the increased sophistication in the loans market where risk is quickly dispersed through syndication or credit derivatives.
