Fears of PP exodus as amendment round looms

Worry, concern, Latino, LatAm, 575
By Silas Brown
06 Oct 2020

US private placement market insiders fear a round of early prepayments, as companies look to wriggle out of the straightjackets of financial covenants and issue public market bonds instead. Amendments brokered at the start of the coronavirus pandemic are up for review now, and sources think these talks will involve tough conversations between borrowers and lenders.

When the pandemic hit European capital markets in March, the PP market faced a wave of amendments. Companies asked their creditors, banks and institutional investors for covenant relief as their revenues disappeared during lockdowns. By and large, these negotiations were fruitful.

“There have been many, many waiver talks, and ...

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