Covenant-Lite Loans: Borrowers Are Running the Show


Stephanie McCann and George Houhanisin wrote this bylined article about so-called covenant-lite loans, which offer borrowers less restrictive or no financial covenants and greater flexibility to transact business in exchange for paying higher loan terms. “Lenders are ever-more willing to offer such loans to high-quality borrowers in the middle market,” the authors wrote, and they predicted that the loans “will continue to be in vogue so long as the supply of debt capital remains high and lenders compete for higher yields.”

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