Cov-lite proliferates, leverage climbs in middle market as new funds pile in

Yield-chasing investors are piling into US direct lending, and the move is taking its toll on credit underwriting. Cov-lite terms and more aggressive leverage are seeping into the traditionally conservative middle market space, even as the spreads on offer track tighter to the larger broadly syndicated market.

  • By David Bell
  • 17 Nov 2017

The US middle market is now churning out more highly levered deals than the traditionally more aggressive broadly syndicated market, while covenant lite features are creeping deeper into middle market loans.

Research from Wells Fargo released on Friday shows that more middle market leveraged buyouts were closed with ...

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