Mark Birkett spoke with S&P Global Market Intelligence Senior Editor Shivan Bhavnani about the current state of the debt capital markets, Covid-19’s impact, and what the future holds for middle-market financing.
With the new-issue market largely closed due to coronavirus-related volatility, the primary market of the post-pandemic era has begun to take shape.
Not surprisingly, it’s going to be more disciplined than the tight spreads and loose covenants in recent years.
Other credit agreement terms have tightened up considerably as well.
“In the middle market, even for companies under $15 million in EBITDA, we’ve seen sponsors over the last several years really try to pull down terms from the broader market, including builder baskets used for the retained portion of excess cash flow and providing 30% covenant cushions,” Birkett says.
“These types of terms coming down from the larger markets are likely going away now.”
The article currently resides behind a paywall. To request a pdf of the article, reach out to Olga Jewusiak.