Cloud 9fin Jane’s LME Addiction — Are lender voting and concentration caps the new and improved DQ lists?
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Nov 13, 2025 Brian Resnick, a restructuring partner at Davis Polk, specializes in liability management, while Hilary Dengel focuses on sponsor finance and distressed financings. They dive into the nuances of voting and concentration caps in credit agreements, discussing their potential to revolutionize creditor organization. The duo explores whether these new provisions can outshine traditional DQ lists, and assess the impact of caps on co-op formation. With practical insights into legal drafting and market acceptance, this conversation offers a fresh perspective on evolving lending landscapes.
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LMEs Drive Front‑End Leverage Plays
- LMEs remain active and liability management is common, driven by maturity extensions, liquidity needs, and discounts.
- Sponsors and lenders jockey for front-end document leverage to influence future LMEs and creditor organization.
Voting Caps: Mechanics Matter
- Voting caps limit how much voting power a single lender can exert regardless of economic exposure.
- Key drafting points are cap percentage, affiliate attribution, covered exposures, and borrower waiver rights.
Keep Waiver Rights For Flexibility
- Borrowers should keep waiver rights for voting/concentration caps to retain flexibility with supportive large holders.
- Consider if you truly want to limit a strategic lender who may later be needed to support a restructuring.