Volatile credit markets and guarded banks have made securing term loan C (TLC) debt attractive for borrowers who heavily rely on letters of credit to trade but either have low credit ratings or otherwise have difficulty accessing large enough revolving facilities to support the high amount of letters of credit needed.

HEADLINES

Yesterday, the Board of Governors of the Federal Reserve System (“Board”) and the Federal Deposit Insurance Company (“FDIC”) (together, the “Agencies”) issued feedback and other guidance regarding the resolution plans (or living wills) of 12 global systemically important banks (“GSIBs”). Specifically, the Agencies finalized guidance (Final Guidance) to the eight US GSIBs regarding the firms’ resolution pl

The first of three compliance deadlines for US regulations requiring resolution-related amendments to qualified financial contracts is January 1, 2019, and delaying compliance until the subsequent deadlines creates additional risk. Compliance programs may not be able to eliminate this risk due to the scope of contracts to be remediated and the staggered compliance period that looks back to the first compliance date.

Introduction

Over the last few years, the European leveraged finance market has seen rapid growth of senior secured high yield notes (“SSN”) and senior secured covenant-lite term loan  B (“TLB”) financings. A common feature of both SSNs and TLBs (together “Senior Secured Debt”) is that their terms typically permit the incurrence of senior unsecured debt by a borrower and its restricted subsidiaries (a “Credit Group”) subject to either satisfaction of a  financial ratio or through various permitted debt baskets.