This programme is aimed at professionals involved in syndicated high-yield (leveraged) loans used by both Sponsored and Corporate borrowers.
Historically, bonds were structured mainly as junior debt in the European high yield market whereas the recent trend has seen them used increasingly used as senior debt together with senior loans and/or super-senior RCFs in bifurcated pari Loan / Bond structures.
These developments have intensified pressure on syndicated lenders to adopt a more borrower-friendly approach than is advocated by the relevant Loan Market Association precedents. Borrowers have become increasingly frustrated by the conflicts between the flexibility offered by incurrence-based bond covenants and the more restrictive maintenance-based loan covenants. This conflict is driving convergence between these products and has accelerated the migration of terms from bonds to loans and vice versa.
Well known examples of the former include cov-lite loans and debt buy backs but more recent areas include covenant release/loosening on I-Grade rating and greater flexibility in the use of the various permitted baskets (including reclassification and splitting).
The recent Orange deal introduced a more alarming (and little noticed) innovation which, if adopted in loans, could allow Midco permitted payments to service debt.
This programme will look at the current trends and developments in syndicated loans and will draw on data and analysis from DebtXplained’s Representative Loan Terms Database.
The database is a unique tool that has already changed the way that sell-side practitioners pitch for mandates and keep abreast of market trends. It tracks over 400 terms of loan documentation on a non-confidential basis allowing the users to precisely understand what is “market” for all significant negotiating points of a deal at any given time.
This information has never been available to the market before and gives borrowers, bankers, lawyers and advisors unprecedented knowledge of the current trends and practices in the Loans Market and Loan Terms.