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  • videocam On-Demand
  • signal_cellular_alt Intermediate
  • card_travel Banking and Finance
  • schedule 90 minutes

Structuring Covenants in Leveraged Financing and High-Yield Bonds

Additional Debt Covenants, Equity Cures, Builder Baskets, Restricted Subsidiaries, Events of Default

$347.00

This course is $0 with these passes:

CLE
ALL
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Description

Due to investor appetite for higher yield bonds, strong demand continues in the market for the issuance of covenant-lite leveraged loans and high-yield bonds with similar covenants.

Prevailing trends are the issuance of loans and bonds that do not contain maintenance covenants. Alternatively, documentation may include springing maintenance covenants, performance cushions, and equity cures. Often borrowers are allowed to incur additional debt, make acquisitions, and repay subordinated debt. Covenant-lite loans may include "builder baskets" to fund these other transactions.

As with high-yield indentures, the parties may determine that some subsidiaries are "unrestricted" and not bound by the leveraged loan covenants. The deal often also includes one or more subsidiary guarantors. Counsel should understand the ramifications of each for the borrower and the loan.

Listen as our authoritative panel examines and compares terms and conditions contained in leveraged loans and high-yield bonds. The panel will review current covenants from both the borrower and lender perspectives.

Presented By

Ilona Potiha Laor
Partner
A&O Shearman

Ms. Potiha specializes in representing lenders, financial institutions, and borrowers in connection with a wide range of financing transactions, including leveraged and investment-grade financings, acquisition financings, spinoffs, cross-border financings, debt restructurings, and other secured and unsecured financings. She is a Client Relationship Partner for a major firm client. Ms. Potiha is also the head of the US Women's Committee, which has won awards for affinity group impact for educational and awareness raising as well as an affinity group impact award for mentoring and training.

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Michael J. Steinberg
Partner
A&O Shearman

Mr. Steinberg focuses his practice on various types of financing transactions, including leveraged acquisition financing, specialized finance structures (including derivative-linked and asset-backed), as well as unsecured and secured bank and private financings generally, with experience in asset classes such as motion pictures, energy, manufacturing, pharmaceuticals and airlines. He represents investment and debt funds, major corporations, banks, emerging businesses and financial sponsors

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Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.


  • Live Online


    On Demand

Date + Time

  • event

    Thursday, July 24, 2025

  • schedule

    1:00 p.m. ET./10:00 a.m. PT

I. Current leveraged loan covenants

A. Equity cures

B. Additional debt

C. Acquisitions

D. Investments

E. Repayment of junior debt

II. Similarities of leveraged loan terms with high-yield bonds

A. Restricted subsidiaries

B. Builder baskets

C. Events of default

III. Opportunities and risks for borrowers and lenders

The panel will review these and other key issues:

  • What are the market forces impacting covenants in leveraged loans and high-yield bonds?
  • What are the typical features of covenant-lite loans?
  • What are the typical features of high-yield lite covenant packages?