FREE MEMBERSHIP Includes » ABL Advisor eNews + iData Blasts | JOIN NOW ABLAdvisor Gray ABLAdvisor Blue
Skip Navigation LinksHome / News / Read News


Lenient Lending Policies Raise Risk Profile in U.S. CLO Market, Report

September 25, 2017, 07:42 AM
Filed Under: Industry News

With three-quarters of all new loans considered "covenant-lite," lenders are now eyeing deals that include too many additional protections with suspicion, according to a report from Bloomberg.

The report notes that lenders are favoring lenient terms for borrowers, including first time issuers and smaller companies with unproven track records, that once would have warranted periodic performance goals.

“It’s basically the worst it’s ever been in terms of loan covenant protections,” said Derek Gluckman, senior covenant officer at credit-rating firm Moody’s Investors Service, in an interview with Bloomberg.  According to the report, protections have gotten so lax in the $1 trillion market for U.S. leveraged loans that if an offering comes with decent covenants, lenders take it as a sign that something’s wrong with the deal.
Click here to read the article in its entirety at

Comments From Our Members

You must be an ABL Advisor member to post comments. Login or Join Now.