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The Default Notice — Best execution in an un-Sertan world
Max Frumes
+Rachel Butt
+ 2 more
•1 min read
If you’re an advisor to a distressed — typically private equity-backed — issuer of broadly syndicated loan debt that is contemplating an out-of-court restructuring and the credit documents do not contain a so-called “Serta blocker”, you’re in luck.
In order to raise capital and/or slash debt and/or extend maturities and/or cure potential events of default, you can select a group of lenders which will provide more capital in exchange for exchanging their existing debt into new debt that sits in a priority position versus similarly situated lenders that you leave out. Generally, all that is needed is the permission of the holders of a majority of the existing loans issued under the relevant credit agreements.
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