We instinctively knew making “Smooth Sailing” our commentary title last week invited retribution from the market gods. No sooner had we hit the “Send” button to our 50,000 subscribers when the latest round of tariffs on China was launched. Having lived through countless market bumps, our editorial staff decided to press on regardless with our…
“How do you come up with all the ideas for your columns?” That’s a question we frequently hear from readers. Our answer is that we don’t have to come up with them. They present themselves all week, every week. We just watch and listen. Take this week. End of July often involves water-related activities. For…
“There is no passive option in direct lending.” So begins “Selecting Direct Lending Managers,” Chapter 13 in Steve Nesbitt’s Private Debt: Opportunities in Corporate Direct Lending. This asset class is indeed available only through active management. As we’ve discussed in this series, the Cliffwater Direct Lending Index (CDLI) is an excellent proxy for middle market…
Last week in our special series on visibility in direct lending, we touched on the element of risk/reward. This week we examine relative credit losses and liquidity of the asset class. The issue of private credit losses cuts to the heart of transparency. Since middle market borrowers are generally smaller, private, and unrated, and their…
Coney Island was the scene last Thursday of Nathan’s Annual July Fourth hot dog eating contest. For the 12th time in 13 years the men’s champion was Joey “Jaws” Chestnut. He downed 71 franks and buns – not his personal best, but far ahead of the second-place finisher (50). The top woman, Miki Sudo (31),…
With the July 4th holiday weekend looming, readers of last week’s column on shark tracking have asked how they can keep informed of Cabot’s progress. That particular denizen of the deep was last heard from about two weeks ago off the coast of Bar Harbor, Maine. You can follow him at ocearch.org (https://www.ocearch.org/tracker/?details=312). We continue…
In all the excitement surrounding our just-ended special series on covenant-easing [link] we must have missed it. But several readers pointed out we had neglected to cover the highly unusual sighting last month of a great white shark in Long Island Sound. Cabot, a nine-foot, eight-inch, 533 lb. tagged fish had been tracked for months….
As we wrap up our special series on how credit agreement terms are eroding, we asked our distinguished team of lawyers from Morgan Lewis: What should we expect, as issuers and credit providers, to come up in deals with financial covenants? “Financial maintenance covenants are often included in loan documents, even in larger deals,” said…
Our special series on envelope-pushing in the world of loan covenants continues with a look at “limited condition transaction” provisions. These provisions allow the borrower to decide, at its option, when it wants to test the conditions to entering into a transaction (typically an acquisition) that is not subject to a financing condition – sometimes…
As we continue our special series on covenants, we’ve noted how lenders and sponsors are pushing envelopes to deal with an increasingly competitive landscape. This includes areas of the credit agreement that might otherwise appear innocuous. Take financial statements. Quarterly numbers are typically due within 45 days after fiscal quarter-end, and annuals within 120 days…