Market Volatility Underscores the Need for Knowledge
Credit markets have seized up following the collapse of SVB, with billions in offerings across asset classes put on hold as the situation unfolds. The unpredictable fallout of the unwind of liquidity following rate hikes last year were recently covered by Bloomberg, with one market participant noting: “We’ve now got to the level of tightening where mismanaged companies are beginning to break.”
There has never been a more critical time to invest in an insurance policy that can help protect lenders and other market participants against further shocks – education.
The market is full of businesses with over-levered capital structures, and the cracks will no doubt start to show. Some of those are borrowers in the leveraged finance markets who have entered into agreements with lenders that contain some of the most complex provisions ever devised by legal counsel.
The only way to protect against the potential downside inherent in these provisions is by investing in education on the meaning of these terms, how to assess the risk they represent, and how to appropriately negotiate lender protections going forward.
That is exactly what FLT’s Leveraged Finance Covenant Training equips our clients to do.
Our course curriculum takes students step-by-step through covenant analysis, highlighting the key risks of each covenant, and how to analyse each provision in those covenants in the context of the deal in question.
An essential aspect of the training is its on-demand platform – the videos can be watched when needed and they are always available should students wish to revisit a concept in light of emerging news on a borrower.
Another benefit to our clients is our community, access to regular Q&As and the ability to ask me questions – a lifeline during times of extreme uncertainty.
The SVB story will take time to play out, and the uncertainty will continue to cause ripples of volatility in the financial markets. In the meantime, LFCT students are using this time to learn how to find needles in the proverbial haystack – a skill that will allow them to ride the waves with confidence that they can find potential covenant risks before they matter.