Sponsors restrict loan sales in private debt market

摘要

Sponsors are imposing stronger restrictions in loan agreements to limit a direct lender's ability to offload debt to third parties, as the credit cycle advances and fears of a downturn increase. Sponsors are implementing tough transfer restrictions and reducing market liquidity, to ensure access to unfunded facilities, including capital expenditure and acquisition lines. "Sponsors are getting nervous about downside risks and are restricting transferability in their loan agreements. Sponsors want to ensure they can access their capex facilities to make acquisitions," said Stuart Brinkworth, head of leveraged finance Europe at law firm Mayer Brown.