Cohen: Covenant Loophole Hurts Bondholders

Sheahan, Matthew
November 2010
High Yield Report;11/22/2010, Vol. 21 Issue 47, p17
The article deals with a report issued by credit research firm Covenant Review which revealed that bondholders failed to recognize and address the implications of a change-of-control loophole that has begun showing up in bond covenants. Adam Cohen, founder of Covenant Review, explains how change-of-control covenant negatively affects bondholders. A New York-based managing director who works in syndications relates a situation when the loophole is justified. It discusses the change-of-control loophole in the deal issued by CVR Energy in March 2010.


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