Forward start facilities will come to US

Author: | Published: 7 Aug 2009

The UK trend for using forward start facilities to help distressed companies has even greater potential in the US, as creditors try to avoid Chapter 11.

If a company files for Chapter 11 it opens itself to a judge-appointed restructuring that is expensive for companies and can dilute senior lenders. So those lenders are welcoming forward start facilities, while companies are keen to avoid expensive debtor-in-possession loans.