This chapter delves into the complexities of securitizing intellectual property (IP) and the potential loopholes that exist. It discusses the concept of stripping out IP to raise cash and explores the idea of licensing IP back to generate revenue for securitization. The chapter also analyzes the possibility of whole business securitization with IP, raising concerns about collateral and loose covenant terms.
The infamous J.Crew maneuver was a bombshell, setting a blueprint for contentious liability management deals and sparking a wave of efforts to block such maneuvers. Now, some direct lenders are worried they've found a way around those blockers.
As we wrote earlier this week, securitization baskets in some credit agreements could be loose enough to allow borrowers to securitize assets like intellectual property.
How realistic is this idea, and what can people do about it? Will Caiger-Smith quizzes covenant expert James Wallick to get the answers.