Direct lenders on both sides of the Atlantic are increasingly pushing for robust protections against liability management exercises (LMEs) in their credit docs, and are conceding more flexibility to borrowers to secure them, according to 9fin sources.
While still rare in the US and unheard of in European private credit, managers are watching LMEs happen in the syndicated market and are looking to protect themselves accordingly.
Last year, 100% of the 452 US private credit deals Proskauer advised on that had unrestricted subsidiaries featured J. Crew blockers, according to the law firm’s latest data, up from 95% in 2024.
Likewise, 71% of European deals the firm worked on that included unrestricted subsidiaries featured the same blocker — a sign of the accelerating homogeneity between US and European credit docs.
“J. Crew protections have been ticking up each year and we’re also seeing upticks in Envision and Pluralsight protections,” said Adam Nelson, a partner in Proskauer’s private credit practice.
Balancing these blockers with the need to stay competitive and not risk losing deals to other lenders who can offer greater flexibility is now a key consideration in today’s market.
“It has become table stakes in the US for private credit...
