Jainisha Amin

Deep Dive Christine Tognoli +Jainisha Amin + 1 more 13 August 2023•2 min read The last couple of years have caused us to rethink our usual approach to a covenant trends piece. Years of steady loan issuance lent themselves to year-on-year covenant erosion trend updates. But 2020 through 2022 turned the consistent pattern of trend updates on its head: first, the pandemic-driven slow down (albeit relatively brief) in 2020; then, a frenetic 2021 which abruptly came to a halt in 2022.

In this 9fin Educational piece, we discuss the different types of senior and priming debt, including structurally senior, effectively senior and super-senior debt. While we focus on these debt categories in the context of large-cap European leveraged loan agreements (“SFAs”), each debt category is equally relevant when considering priority of debt in other debt instruments, including high yield bonds. This is the first part of a two-part series on priority of debt.

The snooze/lose provision in a European leveraged loan agreement (”SFA”) is intended to encourage lenders to respond to consent requests in a timely manner or risk being disenfranchised. The typical snooze/lose provision in an SFA provides that the commitment of any lender who fails to respond to a consent request within a set period (usually 10 business days) will be disregarded when determining whether the relevant majority, super majority or all lender threshold has been reached.