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Maria McGuire Quoted In S&P Global Market Intelligence

November 29, 2017

Maria McGuire, principal in the firm's Commercial Finance Group, was quoted recently in the S&P Global Market Intelligence article "Amid demand for yield, covenant  erosion takes hold in middle market". The article discussed the increasing popularity of covenant-lite loans in today's leveraged loan market.

Covenant-lite issuance has taken the middle market by storm this year, technically making up 36% of new issuance. Middle market issuers are becoming increasingly aggressive regarding leverage headroom, not debt, and add-backs, prompting some in the space to dub some of today's deals as "covenant-loose". Sometimes these financial covenants are so loose, they are not even tested. 

"There are many deals which have only one financial covenant, which is only tested if the line is drawn to a certain extent," McGuire says, "this is definitely an erosion to what we saw a few years ago, when there was usually a full set of financial covenants that are being tested all the time." 

To read the full article, please click here

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