A call to arms

Covenants have been a cause of conflict between issuers and investors for as long as the bond market has been in existence. But now that appetite for lending has dipped, can investors use the crisis in credit to demand the best protection yet? Matthew Attwood reports

Before conditions in the debt world deteriorated last summer, one of the most energetically contested topics in the market was that of bond covenants. In an environment defined by the easy availability of cash, the biggest corporate names were vulnerable to leveraged buy-outs and many investors wanted explicit protection against corporate restructurings, in the form of change-of-control language