Our Legal Insights Blog

Welcome to the first in our mini-video series on Debunking Common Covenant Myths! We’re starting with a topic of critical importance to lenders, whether they’re seeking to protect their existing investment or looking to make a lucrative new one – Priming Debt Analysis.

The festive season is underway, and FoxLegal Training is celebrating its first year, so we have a special treat instore to celebrate. Starting tomorrow we will post a new video each day fromour new video series on Debunking Common Covenant Myths, presented by yourstruly!

In what alternate universe do borrowers never generate losses, secured debt doesn’t mean secured debt, and EBITDA growers upward-adjust fixed baskets that never reduce back down?

The bottom line is that lenders will never get their estimations of capacity 100% accurate because management has access to all data and significant discretion on how to calculate it. Indeed, it’s very likely that their law firm will do the calculating – and two different law firms may well get two different numbers.

One of our most popular modules in our Leveraged Finance Covenant Training course is the chapter on Calculation Mechanics. The topic is also most often requested for deeper learning, case studies and expert input, so we’ve decided to make it the focus of our upcoming Autumn in-person event, taking place on 27th September at The Ned.

We have heard anecdotally that the first half of the year did not usher in the new era of tighter terms, despite the shift in negotiating dynamics brought about by market uncertainty and instability. This surprised some, but it does not surprise FLT.

Second only to our passion for creating the best educational covenant content available is our drive to provide the best possible learning experience for those who take our course. That’s why we’ve taken every step possible to ensure that there are educational options suited to anyone, tailored to each individual’s learning style.

Understanding the myriad ways your debt could get primed is essential to effective credit analysis. This is why we cover subordination in such granular detail in our Leveraged Finance Covenant Training, as illustrated by this video lesson we've shared direct from our online curriculum.