Inside, you will discover:
- Potential indicators of weakness in financial covenants;
- The prevalence of unqualified general baskets in investment restriction negative covenants in over 150 publicly available credit agreements, along with other relevant data points;
- For lenders, the importance of evaluating financial covenants for “trap doors” and practical steps to mitigate risk of collateral leakage or transfer; and
- For borrowers, the importance of evaluating financial covenants for language that may help facilitate creative transactions to create additional liquidity while remaining in compliance with credit facility obligations.