Portability: clause without a cause?

Author: Danielle Myles | Published: 14 Oct 2014

Market participants have queried whether portability provisions, which sponsors and corporates are fighting to include in high-yield documentation, actually provide the issuer any benefits.

It’s the latest evidence that growing tensions between high-yield issuers and investors are based purely on principles rather than pragmatism.

Portability allows issuers to waive bondholders’ change of control (CoC) rights, making it particularly attractive to private equity firms looking to raise funds before selling a portfolio company.

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