Daniel Hendon

Dodgy financial reporting or financial covenant breach

In this article we consider how preservation of an agreed approach to financial monitoring and calculations for leveraged finance loans in the European mid-market is fundamental to maintain suitable protections for private credit lenders. Discrepancies in figures can raise red flags as to whether the financial reporting is simply inconsistent or whether the sponsor is attempting to hide a financial covenant breach. We discuss options available to lenders to clarify figures and request additional information.