While bondholders’ rights have vastly improved
since the early 2000s, the continuing convergence of term loan
B products and high yield instruments is reversing the progress
Panellists at a
breakfast seminar hosted by
Orrick Herrington and Sutcliffe earlier this month said
that at this stage in the economic cycle, bondholders are
losing out. Low interest rates and quantitative easing have
both afforded sponsors a better position for negotiation.
"As a bondholder, you really don’t get much,"
said Justin Holland, managing director at investment bank
Gleacher Shacklock. "You’re taking a significant
leap of faith, and while the situation is improving,
there’s still a long way to go."
Stephen Phillips, partner and co-head of European
restructuring at Orrick, agreed. "Bondholders’
influence via increased voting rights has improved since the