Covenant Amendments in Response to Liquidity Crisis

Companies in the mid-market are seeking amendments to their credit agreements to navigate the liquidity crisis, with varied approaches like waving compliance with financial covenants, replacing them with liquidity covenants, and imposing limitations on accessing certain negative covenant baskets. Lenders' responses differ based on regulations and investor preferences, such as deferring interest payments or forgoing principal and interest payments in exchange for increased returns through additional fees, higher rates, or convertible debt features.