Merlin and Kantar test covenant stretching tolerance

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By Karoliina Liimatainen
10 Oct 2019

The buyout bonds for Merlin Entertainments and Kantar, backed by Blackstone and Bain, will set new standards for European issuers. If the investors strike down the "net short" clauses — as they did in an earlier Inmarsat deal — the sponsors may give up on the controversial strategy to battle hedge funds with large CDS positions.

The net short clause, which was first introduced to the loan market by US tech company Sirius Computer Solutions, is in the documentation for both £635m-equivalent of Merlin bonds and $775m-equivalent of Kantar bonds, and it remains to be seen whether it remains there when the bonds are ...

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