Lender Survey: Are the structural characteristics of loans changing for good?

LSEG (1)
Content hub / Article / LSEG / Lender Survey: Are the structural characteristics of loans changing for good?

Just over half of the audience gathered during Thomson Reuters LPC’s 23rd Annual Loan & CLO Conference said that structures have not changed for good but rather the pendulum will swing back when credit quality deteriorates. However, just over one fifth disagreed, reporting that the genie is not going back in the bottle and once heavily negotiated docs will not be easy to change. Meanwhile, 24% said that structures will continue to be favorable for issuers but select high quality, lower risk credits. With increased optionality in credit agreements, sponsors can pursue a number of avenues and have increased flexibility in case of a credit going through some bumps. For new deals, investors generally have a wish list for rolling back structural deterioration with, not surprising, bringing back covenants with clean historical EBITDA definition meaning capped add-backs and no inclusion of projected results or cost savings at the top of the list. Although a lower spread impacts the immediate economics of a deal, erosion in structures has the potential to affect loss and recovery and conference attendees expect that recoveries may be lower in the next downturn. Looking ahead, some arrangers comment that when there is more supply for investors or if there is a bumpy period of broader market volatility, investors will have more room to push back on recent loosening.

Contact: Ioana Barza
ioana.barza@thomsonreuters.com

Contact Ioana Barza
Making sense of private credit defaults

Webinar

Making sense of private credit defaults

What does private credit default data really tell us? Join our exclusive webinar featuring experts from KBRA, Moody's, Fitch Ratings, and S&P Global to find out.
Register
US Private Credit League Tables H1'26

Report

US Private Credit League Tables H1'26

The definitive rankings covering private credit activity in H1'26.
Download
PitchBook's Q2 2026 US PE Breakdown

Report

PitchBook's Q2 2026 US PE Breakdown

Software freezes and energy powers on as US PE deal value falls 38% in Q2 2026.
Download
Private Debt Investor New York Forum

September 15-16, Hudson Yards, New York

Private Debt Investor New York Forum

Bringing together the investors, managers and advisers shaping the next phase of the market — 200+ allocators and $10.6 trillion of LP capital expected. Benchmark strategies, hear from leading LPs, and cut through market noise over two unmissable days.
Learn more
Credit Journal-Private Credit

Report

Credit Journal-Private Credit

Fitch Ratings’ latest Credit Journal series is a subject-specific, curated compilation of in-depth research and commentary. This edition explores the growing world of private credit, including non-bank lending across business development companies.
Download

Latest news

    Multiples on PE buyouts

    This quarter marks our integration of SPI by StepStone as the primary source for US buyout valuation metrics for the PE Breakdown.

    Read More

    US Leveraged Loan Issuance Slows to $76.5b in July

    The US leveraged loan market has continued to slow from the May level of $104.7b, with approximately $76.5b priced in…

    Read More

    KBRA DLD Default Indices

    Read More