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Developments
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Debt
buyers are increasingly requiring event protection
To
address risk of current market developments
- Increased risk that an issuer will become more
highly leveraged after a private equity sponsored buyout or activist shareholder
inspired recapitalization
- Increased leverage from a buyout or
recapitalization
would otherwise lower value of outstanding debt issues
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Change of Control
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Typically
give holder right to require issuer repurchase
- In event of a change of control
- Usually with a slight premium
Precedent
covenants
- Mylan
Laboratories - Senior Notes
- Pinnacle
Airlines - Convertible Senior Notes
- Cell
Therapeutics - Convertible Senior Notes
- Laboratory Corporation of America - Senior Notes
- E*Trade
Financial - Senior Notes
Precedent
Invocations
SEC_CODE_REF_0090001192884
- Providian - Washington Mutual
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Ratings Downgrade
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Mohawk
Industries - Senior Notes
Temple-Inland
- Senior Notes
- Issuer adds interest rate step-up
- Tied to downgrades by Moody's or S&P
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Final term sheet
(12.05.05)
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Related Topics
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