LevLoan Covenants - We need to talk about the docs
- Kat Hidalgo
With CLO issuance approaching a record year, according to Bloomberg, it’s no secret that demand has heated the primary loan market to boiling point. Issuers have flocked to take advantage of conditions for repricings and refinancings in 2021. Buysiders are reviewing too many credits in too little time, on occasion getting into deals without even looking at the documentation. As such, the sell-side has felt empowered to push ever more outrageous docs.
A first buysider said: “Because the market has been so hot, we’re not getting everything we want so there’s a fight for paper. Investor pushback is probably not getting that much attention.”
But this month, a glimmer of hope emerged for docs-focused buysiders, as several deals faced investor pushback, rather than just the odd one.
In the most shocking show of investor disinterest over a deal yet seen in 2021, Urbaser (B1/BB-/BB), a Spanish waste collection company, had a €1.63bn TLB pulled from the market, with the issuer and advisers citing the market backdrop.