Lenders urged to deploy 'carrot and stick' early on debt restructuring

Carrots px230 for gc
By Karoliina Liimatainen
08 Aug 2019

The weak state of investor protections on leveraged loans should spur creditors to engage borrowers early on debt restructuring, two lawyers have argued. The abundance of cov-lite deals mean traditional early warning signs have evaporated.

Ian Wallace and Christian Pilkington, both partners at White & Case, said that lenders should pressure indebted companies' boards of directors and present a plan for early-stage restructuring before they collapse into insolvency.

They argue that this sort of intervention is necessary because the maintenance covenants, that ...

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