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Private Equity

'Cov-lite' on the rise as buyout borrowers dictate terms

Loans offering limited protection have become the new norm as debt investors forego protection in search of higher returns

'Cov-lite' on the rise as buyout borrowers dictate terms
Photo: Getty Images

Private equity loans that offer limited protection if a borrower runs into problems have become the new norm as debt investors forego protection in their search for higher returns.

After the crisis these "covenant-lite" loans disappeared due to investor resistance, with four years of no issuance in Europe.

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