The Glaring Industry Gap Between Covenant Significance and Available Formal Training
Through progression of our mission to expand the knowledge of covenants and legalese across the leveraged finance industry, we are proud to now have over a hundred active learners. From this pool of active learners and industry guests at our London events and workshops, we have started to consolidate our understanding about the current state of covenant education.
We’ve long been aware that there was a gap between the significance of covenants and the overall lack of formal training and education on the subject available to credit analysts and others in the market. We have been surprised however, to hear first-hand from our contacts quite how significant that gap may be.
From survey responses gathered from leveraged finance market participants, including those working in asset management, banking, and law, we have gathered the following thoughts on covenant education in the market.
Everyone agrees that understanding covenants is key
Everyone who has taken our survey thus far agrees that covenants are an integral part of their day to day role, with half strongly agreeing with this statement.
While the above may not seem a ground breaking revelation, what is surprising is that from the same group of professionals, around 70%said they had received a moderate amount of formal covenant education at best, with the remaining 30% reported that they received little or none at all.
Building on this, we also asked participants whether or not their firm currently had any covenant education or training in place over 80% said their firm did not.
We were aware there was a need for increased formal education on covenants and legalese, and this statistic reinforced our belief that our online covenant training will provide significant value across the market. .
Before FLT was created, firms typically relied on their covenant analysis provider for covenant education – indeed, all of the survey respondents reported that their firm was using some kind of covenant analysis service as their answer to covenant education.
The challenge with this approach is that covenant analysis providers are built to do just that – analyse covenants. Their reports are very useful so long as you understand the language in which they are written – and that language is what we teach.
After demonstrating our bespoke training platform to those who had not yet experienced it, and collating feedback from those currently sitting our curriculum, over 85% agreed that FLT was essential to their understanding of covenants.
We truly believe that providing the industry with formal education on covenants will transform the market by empowering leveraged finance professionals to negotiate more effectively, analyse more deeply, and approach difficult situations with confidence.
If you have not yet had the chance to see the full FLT curriculum or try out our platform for yourself, please drop us an email at info@foxlegaltraining.com and we’ll set this up for you and answer any questions you may have.
It’s time for the industry to close the knowledge gap.