๐ #Foncia covenants are pretty grim ๐คฎ ... maybe even worse than #Ahlstrom... just a few examples of things you can do under the docs below... Message us for our full Legals QuickTake! #LevFin #HighYield
๐ธ Make Restricted Payments (dividends or investments capacity) while in Default or Event of Default, with no requirement to meet the most basic financial health test of 2.0x interest cover ๐คทโโ๏ธ
๐คSell assets (incl. collateral) with no requirement to apply the proceeds to repay secured debt (or in some instances any debt at all).
๐ Pretend your RCF is drawn to inflate your debt capacity under your 'no worse' tests
๐ Layer / prime your existing secured bondholders using non-guarantor subsidiaries, or by granting security over assets not covered by the deal's 'soft security' package
๐ช Convert your RP capacity into secured debt capacity - diluting existing bondholder's value coverage
๐คRe-lever the business above day 1 leverage, pay a dividend to yourself as part of a change of control and port the capital structure without a 101 put offer
๐ฅธ Juice up EBITDA with unlimited add backs, subject to no time limit, and use them to calculate whether you comply with covenants at a time of your choosing
โข โข โข
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