Issues surrounding white lists in loans to financial
sponsors are damaging secondary market liquidity, and may not
achieve borrowers’ intended goal.
The practice sees private equity borrowers include in their
facility agreements a list of pre-approved buyers of the
It is becoming increasingly prominent in Europe, and is
creating further issues for the already struggling secondary
Craig Scordellis, senior portfolio manager at CQS, said the
introduction of the lists is not a problem per se, but it can
present challenges for loan managers. This is exacerbated by
the fact that the white list applies to subsequent transfers,
which further limits the willingness of buyers to agree to take
on the loan.