Haynes Boone Partner Ingrid Bagby spoke with Bloomberg Law as private credit lenders are easing loan terms on existing deals in hopes of staving off costly restructurings, at the risk of an extend-and-pretend dynamic that masks deeper economic strains.
“Lenders also are seeking tighter covenants to make sure they receive robust financial reporting going forward, given some recent cases involving questions about verifying collateral,” Bagby told Bloomberg Law.
Some lenders have returned back to basics in their underwriting, Bagby said, and are asking tougher questions to ensure they understand the risks associated with the credit.
“While extending maturities is not always a long-term solution or permanent fix, it does create some optionality,” Bagby said.
To read the full article from Bloomberg Law, click here.
