Our Legal Insights Blog

Through progression of our mission to expand the knowledge of covenants and legalese across the leveraged finance industry, we are proud to now have over a hundred active learners. From this pool of active learners and industry guests at our London events and workshops, we have started to consolidate our understanding about the current state of covenant education.

At Fox Legal Training, we believe that making legal concepts easy to understand is the key to our students’ success. At the end of the curriculum for each covenant that we cover in our Leveraged Finance Covenant Training, we sum up learning in a digestible “Step-by-Step” lesson, taking our students through the analysis step by step.

Shortly we will be adding a new chapter to our core Leveraged Finance Covenant Training curriculum teaching students how to analyse covenants when a borrower is in distress.

We recently hosted the first of our live events for students, which work alongside our online platform to keep our material up-to-date, incorporate new topics and feature guest speakers.‍ The topic was timely – Key Covenant Risks in Distress – and Houlihan Lokey joined us to share perspectives from the front lines of financial restructuring.

A borrower’s ownership is a fundamental aspect of the risk assessment for any lender. A company’s operations are determined by those with controlling ownership interests, and as such both high yield bonds and leveraged loans contain contractual provisions relating to a “Change of Control”.

Students of FLT’s Leveraged Finance Covenant Training get the best of both worlds – a comprehensive online covenant curriculum available on-demand and across devices, and periodic live events where we deep dive how the materials covered in the course come into play in their day-to-day roles.

Analysing potential value loss starts with the Restricted Payments covenant (which we wrote about last week, and continues with the Asset Sales covenant, where some of the most significant changes to the covenant package have taken place over the past decade.

When it comes to analysing potential value loss, there are two important analyses to keep in mind. One relates to the Debt and Liens covenant, which can impact your day one position in the capital structure.