The Credit Edge by Bloomberg Intelligence Junk Companies Are in Debt Covenant 'La La Land,' Says Fox Legal
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Jul 31, 2025 Sabrina Fox, founder of Fox Legal Training and former head of the European Leverage Finance Association, shares her insights on rising debt documentation risks in a cash-chasing market. She highlights how current provisions often create a misleading reality, akin to 'La La Land.' The discussion dives into the lack of transparency in high-yield debt, key lessons from the Altice restructuring, and the aggressive spread of liability management from the US to Europe. Fox emphasizes the need for training in legal analysis to better navigate these complexities.
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Master Documents With Confidence
- Use Control+F to quickly locate key terms in debt documentation.
- Gain confidence by understanding contract structure; covenants are complex but navigable.
Train to Review Deals Faster
- Attend legal training to fast-track your ability to review loan documents.
- Watching practical walkthroughs can build the confidence to analyze deals quickly.
Use Search to Spot Protections
- Use searches like "liability management" when scanning documents to find relevant protections.
- Knowing document structure shortcuts deal navigation to spot red flags early.