Analyzing Changes in Bondholder Protections and Security Documentation

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Exploring a case study in Europe, this chapter stresses the crucial role of meticulous legal review before investing in distressed debt, showcasing the diminishing levels of bondholder safeguards. A comparison of high yield bond documentation across eras reveals evolving security structures and guarantees, signaling a trend towards reduced asset-level security in contemporary agreements.

The Covenants by Reorg team speaks to Tim Alexander, head of strategy at Ardent Financial, about the unprecedented state of the markets during the Covid-19 crisis, the devolution of covenants, the illusion of protection and key pitfalls for investors, the opportunities presented by weak covenants for distressed investors and swinging the pendulum back to better protection and better compensation. If you are not a Reorg subscriber, request access here: go.reorg-research.com/Podcast-Trial