Leveraged loan covenants are showing banks’
hesitancy to finance all but the strongest of credits. More
robust market flex terms and bigger equity checks have
characterised deals coming to market during summer.
US counsel agree with yesterday’s WSJ report
and its claim that banks are returning in the strongest sponsor
deals, but the Euro debt crisis has taken its toll on US
confidence, and banks are putting a lot of pressure on loan
"Banks are being a lot more cautious in terms of what they
are willing to finance," said Daniel Dokos, chair of Weil
Gotshal & Manges’ finance practice.
"I’ve not seen a big run to covenant lite."
Covenant-lite disappeared around August, making negotiations
vastly different to six months ago. "Pressure from prospective
syndicate members is being put on certain sponsor bells and
whistles that did not receive much scrutiny earlier in