The Big Interview - Tim Polglase

As a massive increase in covenant-lite loans sends jitters through the investor community, the head of leveraged finance at law firm Allen & Overy in London tells Nikki Marmery that cov-lite merely reflects a changing market dynamic

Investors are getting nervous about covenant-lite loans. Data from Standard & Poor's LCD unit shows that nearly $50 billion in cov-lite loans was arranged in the first quarter of 2007 alone - more than double the total volume for the whole of 2006. Private equity firm Kohlberg Kravis Roberts set a record with plans for $16 billion of cov-lite financing for its buyout of First Data Corp in May. That same month, Anthony Bolton, a veteran fund manager at Fidelity Investments, famously warned about