The Rise of Liability Management Exercises

Liability Management Exercises (LMEs) have gained attention due to the unique economic environment impacting businesses. Factors like inflation, sanctions, and post-pandemic issues, combined with high liquidity in financing markets, allow companies to seek financial solutions through LMEs instead of full restructurings. LMEs include drop-down financing transactions and exchange offers, aimed at addressing liquidity, deleveraging, and upcoming maturities. These transactions originated in the US but have now become standard in all sponsored transactions across Europe as well.