Market Trends 2021/22: Covenant-Lite Loans

Review this market trend practice note for an overview of covenant-lite loans in today’s market. The term covenant-lite broadly refers to borrower-friendly loan transactions having limited or no maintenance-based financial covenants. The practice note discusses recent market trends in publicly filed covenant-lite credit agreements since the last quarter of 2021.

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Related Content

• Financial Covenants Clauses (Credit Agreement)
  Use these clauses in your credit agreements for syndicated loan transactions to require the borrower to comply with negotiated financial performance standards. These clauses assure lenders that the borrower will be able to repay its loans as planned.

• Financial Covenants and EBITDA Calculations in Credit Agreements
  Read this practice note to understand the use of financial covenants in credit agreements, which require the borrower to comply with negotiated financial performance benchmarks. It also discusses how EBITDA is defined in a credit agreement.

• Affirmative, Negative, and Financial Covenants
  Review this practice note to understand covenants found in credit agreements (i.e., promises made by the borrower to take certain actions, or to refrain from certain actions, during the life of the loan), along with the processes by which loan parties are captured, or not, by those covenants.

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