In an era of low interest rates and liquid credit markets, European leveraged borrowers have had their choice of a range of financing options offered by yield-hungry investors. However, following the peak of the credit cycle, borrowers may start to see an impact on economic performance, with a resulting negative effect on cashflows and, potentially, issues with their financing. Key to avoiding an expensive (and public) formal bankruptcy process is ensuring that the group can continue to operate, to the extent possible, on a “business as usual” basis, respond to prevailing market conditions and ultimately come to an agreement with creditors from, as far as possible, a position of strength.
This article by Clive Wells and Finn Howie discusses how this strategy can be achieved within the terms of a typical suite of leveraged credit documentation.
Click here to read the article.