Our Legal Insights Blog

PitchBook reports private credit lenders negotiating ownership structures at origination - stacked holding companies above the borrower - so a future debt-for-equity conversion can run through a top-layer foreclosure and a clean sale below it. Cheap to ask for and easy to miss on review; the mechanics and the review points are inside.

Six years after the 2020 exchange, the Serta Simmons uptier has a price. The current fight is over whether the market gets to read the itemized version.

The Serta Simmons litigation produced its most consequential document-level ruling on July 7th, and the number that came out the other end - $400m and change - is worth the attention of anyone who structures or advises on leveraged loans.

I've watched Payments for Consent disappear from the levfin covenant package for years, and I'll admit it broke my heart a little - deal by deal, it was like watching a slow car crash. So the recent New York ruling in the Hunkemöller uptier made my day because I saw the covenant I once loved doing its job.

Arxada's creditors had leverage because the transaction had to come through them - they extended, and they priced that consent. First Brands is the other end of it. Nobody had to ask the lenders for anything.

The sacred rule of restructuring, that everyone in the same class gets the same pro rata treatment, effectively broke in Europe last year. The surprise is who broke it. It was not a sponsor. It was the creditors. That was the scene-setter from Ash Tehrani, Senior Counsel at Akin in London, on this week's Knowledge Series episode. Read his take on the market, three years into the LME revolution that's reshaped market dynamics for good.

A 268-page facility agreement isn't 268 pages of easy reading. Faced with that much dense text, most people do t he natural thing: start at page one and push through. That's the single worst way to read a loan agreement - and it's how the most expensive mistakes get made.

Singapore was the latest stop in my documentation risk roundtable series, and ranks among my favorite conversations because I learned so much. Around the table were a credit investor who reads documents for a living, a trade-credit and political-risk insurer, a sustainability specialist, an allocator who rarely sees an individual deal document, and a ratings agency analyst focused on the more complex side of the market. Our conversation kept coming back to the ultimate question for lenders: how can you tell if the document is strong enough for you to get your money back, and if it isn’t, what other options do you have?