Investors fight to stop assets being pulled into black holes - Debtwire

Investors fight to stop assets being pulled into black holes

06 July 2018 - 12:00 am

US loan investors are fighting back against terms which they believe are effectively turning supposedly senior secured loans into unsecured agreements. Some are outright rejecting loans which feature excessively borrower-friendly language, while others are lobbying rating agencies to assign lower assumed recovery rates to certain deals.
 
According to Creditflux’s sister publication Xtract Research, 44% of large US sponsored credit agreements in Q1 2018 had provisions allowing issuers to make unlimited investments in non-guarantor restricted subsidiaries.
 
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