Tom Miller

Don’t put all your debt in one basket: debt incurrence flexibility in leveraged finance transactions

The era of cheap debt is over (at least for now). However, debt of course remains a key financing strategy for European companies. Sophisticated sponsors and borrowers are focused on ensuring maximum flexibility for debt incurrence under the terms of their facilities agreement – both to protect against a downside scenario and to ensure sufficient capacity to meet the requirements of their business plans. This article outlines what those flexibilities currently look like in market documents and where they are heading, with a close focus on the institutional term loan market.