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Reorg Radio
Covenants: 90%/100% Consent Can be Bypassed Using Scheme, Part 26A Plan(Nov. 17, 2020)
Nov 17, 2020
Shan Qureshi discusses the spotlight on consent thresholds for inserting new super senior debt after Serta Simmons, Boardriders, and Trimark. The podcast explores consensual vs non-consensual amendments, borrower's options for contract amendments, differences in consent thresholds, flexibility in implementing amendments and restructuring processes in England, and challenges faced by Swissport in creating a new super senior debt basket.
23:03
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Quick takeaways
- Consensual and non-consensual amendments are two options for implementing changes in debt documentation, with non-consensual amendments being facilitated by restructuring tools with lower consent thresholds.
- The Swissport case study exemplifies the importance of correctly interpreting amendment provisions, inter-creditor agreements, and understanding the implications of partial amendments.
Deep dives
Options for Implementing Amendments
Borrowers have two options for implementing amendments: consensual or non-consensual. Consensual amendments involve obtaining the consent of creditors holding the required percentage of outstanding amounts under the debt documentation. Non-consensual amendments are implemented through restructuring tools like the English scheme of arrangement or the Part 26A restructuring plan, which have lower consent thresholds. The choice between the two options depends on the level of creditor support and the consent threshold for the amendments.
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