Debtwire Radio

Cov-lite deals are now a market norm, and the lack, or absence of covenants in leverage deals has often been cited as causes of why sponsors can take so long to nip problems in the bud. More recently, however, private equity sponsors have become more protective of their deals by including more and more clauses to limit debt ownership transferability in loan docs. While the long-term implications of these restrictions on debt restructurings are still being digested, the most obvious ramifications of expanding 'whitelists' has been to constrain market liquidity. JPMorgan’s executive director Ash Tehrani, the desk lawyer for the EMEA secondary loan trading desk, joins Adelene Lee, director of subscriber/content relations at Debtwire, to discuss how restrictions on loan transferability are impacting the distressed market. They also explore why limiting lenders' ability to sell out of problem credits could negatively affect how businesses restructure and how investors are able to manage their risk exposures dur