Credit investors up in arms over lax covenants

russia-poster
Will bondholders unite to demand greater protection?

Covenants have long been a bone of contention between issuers and investors. While they offer protection for bondholders – setting limits on the additional debt an issuer can incur during the life of a bond, for example – they can also restrict companies’ room for manoeuvre, anathema to executives looking to maximise profits. In this long-running power struggle, issuers have been winning the battle of late.

Last year saw a resurgence in covenant-lite debt (Credit November 2009, pp. 20–22), as

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: