Investors fight to stop assets being pulled into black holes

US loan investors are fighting back against terms which they believe are effectively turning supposedly senior secured loans into unsecured agreements. Some are outright rejecting loans which feature excessively borrower-friendly language, while others are lobbying rating agencies to assign lower assumed recovery rates to certain deals.
 
According to Creditflux’s sister publication Xtract Research, 44% of large US sponsored credit agreements in Q1 2018 had provisions allowing issuers to make unlimited investments in non-guarantor restricted subsidiaries.
 
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