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Cov-lite

Cov-lite  淡契约

 

Cov-lite (“covenant light”) is financial jargon for loan agreements which do not contain the usual protective covenants for the benefit of the lending party. Although traditionally banks have insisted on a wide range of covenants which allow them to intervene if the financial position of the borrower or the value of underlying assets deteriorates, around 2006 the increasing strength of private equity firms and the decreasing opportunities for traditional corporate loans made by banks fuelled something of a “race to the bottom” with syndicates of banks competing with each other to essentially offer ever less invasive terms to borrowers in relation to leveraged buy-outs.

COV-LITE淡契约)是不包含一般贷款协议会有的保护放贷人利益的借贷协议。虽然传统上银行都坚持有一个广泛的条约允许他们在借方的财务状况或相关资产的价值恶化时进行干预,但是,在2006年左右,各银行集团为了竞争,提供给借方跟杠杆收购有关,基本上更少侵入性的条件,导致削价竞争的局面,结果私人股权投资公司的实力增强以及由银行经营传统的企业贷款机会减少。

Cov-lite lending is seen as more risky because it removes the early warning signs lenders would otherwise receive through traditional covenants. Against this, it has been countered that cov-lite loans simply reflected changes in bargaining power between borrowers and lenders, and followed from the increased sophistication in the loans market where risk is quickly dispersed through syndication or credit derivatives.

淡契约式贷款被视为风险更大,因为它解除了传统契约会提供给借方知道的提前预警迹象。因此,反对的人说,淡契约贷款只是反映了在借方和贷方之间讨价还价能力的变化,接着在日益复杂的贷款市场中迅速通过财团集资或信用衍生工具去分散风险。

 

Contents  目录

  • Covenants  条约
  • Concerns  需关注事项
  • 2007 credit crunch   2007年的信贷紧缩
  • References  参考文献
  • External links  外部链接

 

Covenants  条约

Practise varied, but characteristically, cov-lite loans would remove the requirement to report and maintain loan to value, gearing and EBITDA ratios.

做法不尽相同,但特点是淡契约式贷款将删除报告和维持贷款与价值比例的要求,资产负债与EBITDA的比率。

More aggressively negotiated cov-lite loans might also remove:

  • events of default relating to “material adverse change” of the position of the borrower
  • requirement to deliver annual accounts to the banks
  • restrictions on other third party debt
  • restrictions on negative pledges
  • requirements for bank approval to change the form of the debtor group’s business

更有竞争力的淡契约式贷款的商谈也可能删除掉以下事项:

  • 跟借方面临“重大不利变数”有关的违约事件
  • 要求提供给银行的年度账目
  • 限制其他第三方的债务
  • 限制负面的抵押
  • 改变债务人集团的业务形式时需要银行的审批

 

Concerns  需关注事项

Many at the time were alarmed by the development; The Economist in particular thought it was a concerning and short-sighted development,[1] and the Financial Times endorsed the view of Anthony Bolton of Fidelity Investments who warned on his retirement in May 2007 that cov-lite could be “the tinder paper for a serious reversal in the market.”[2], the movement in the market was inexorable. Others argued that the move to cov-lite was a welcome simplification of loan documentation, and was fully justified as the banks would hedge their risk by transferring exposure to the loan in the CDO market.[3][4] It was also pointed out at the time that cov-lite loans operated in a very similar way to bonds, but at lower values.

当时许多人对事态的发展感到震惊,特别是经济学人期刊认为这是一个令人担心和短视的发展,而金融时报也赞同Fidelity Investment富达投资的Anthony Bolton安东尼博尔顿的看法,他在2007年5月退休时警告说,淡契约可以是“市场上的严重逆转的火绒纸,市场的动向是残酷的。另一些人认为淡契约是个受欢迎被简化了的贷款文件,完全合理,因为银行可以通过对冲去转移贷款在CDO市场面对的风险。当时也有人指出,淡契约式的运作方式类似债券,只是价值比较低。

The high water mark of cov-lite loans came in the acquisition by Kohlberg Kravis Roberts, a US private equity firm, by way of a record $16bn cov-lite loan for its buy-out of First Data.

淡契约式贷款的高水位标杆出现在美国的私有股权公司Kohlberg Kravis Roberts,以创纪录的160亿美元通过淡契约式贷款收购了First Data第一数据的案例上。

 

2007 Credit Crunch 。 2007年的信贷紧缩

The tendency towards cov-lite loans ended abruptly with the 2007 subprime mortgage financial crisis. Some commentators subsequently sought to attribute the credit crunch arising from crisis to cov-lite loans, although the LBO market is almost entirely unconnected with the sub-prime mortgage market in terms of exposure. However, in the credit crunch which ensured, cov-lite loans significantly hampered the ability of banks to step in and both seek to rectify positions which were going bad, and to limit their exposure once matters had gone bad. The suggestion that banks risks were mitigated through the CDO market was difficult to sustain in light of difficulties in that market itself as a result of the credit crunch. In March 2011, the Financial Times reported that in the three months prior, cov-lite loans to the value of $17bn had been issued.

倾向于淡契约式贷款的发展突然在2007年的次贷金融危机时结束。一些评论员随后试图归咎于淡契约式贷款的危机引发的信贷紧缩,虽然LBO市场与次级抵押贷款市场所面对的风险几乎完全无关。然而,接着而来的信贷紧缩,淡契约式贷款显著地阻挠了银行介入纠正恶化的局面以及在坏事发生时降低风险的能力。因此,在信贷紧缩的市场里,银行要通过CDO市场去减少亏损的做法就很难持续下去。2011年3月,“金融时报”报道,在三个月前,淡契约式贷款已经发出了价值170亿美元的贷款。

 

References  参考文献

^ “You only give me your funny paper – Debt markets turn grouchy as creditors ask for more”. The Economist. June 28, 2007.

“你只给我怪文章-债券人要更多时债务市场变。。。”。经济学人,2007年6月28日。

^ a b “Bolton warns of bubble fuelled by “cov-lite” loans”. Financial Times. May 18 2007. (subscription required)

“波顿警告淡契约吹起的泡沫”。金融时报,2007年5月18日。(需订阅)

^ Salmon, Felix (June 12 2007). “A Closer Look at Cov-Lite Loans”. Market Movers. Portfolio.com. BizJournals.

Salmon,Felix(2007年6月12日)“详看淡契约的贷款”。市场驱动者,Portfolio.com,BizJournals。

^ Comment, Deal (March 29, 2007). “Through the looking glass with leveraged finance”. Legal Week blogs. Archived from the original on June 30, 2007.

评论,成交(2007年3月29日)“通过眼镜看杠杆融资”。Legal Week部落格,源自原文于2007年6月30日刊登的档案。

^ Tett, Gillian (March 4, 2011). “The return of cov-lites hints at more caution not madness”. (Financial Times) Fidelity Worldwide Investment. Archived from the original on March 4, 2011.

Tett,Gilllian(2011年3月4日)。“淡契约的回流暗示了更多谨慎而不是跟疯“。(金融时报)Fidelity全球投资,源自原文于2011年3月4日刊登的档案。

 

External Links  外部链接

  • Money Terms – “cov-lite”  金钱术语- “淡契约”

Categories  分类

  • Financial terminology  金融术语
  • Contract clauses  合同条款
  • Private equity  私人股本

—— END ——

 

Source >  Wikipedia at en.wikipedia.org/wiki/Cov-lite

Translated by > BlogHost — hkTan

Word Count > approx.700 words in English

 

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