Welcome to the first edition of Need to know, Osborne Clarke's Leveraged Finance Market Update, offering a bite-size guide to UK mid-market developments.
We have found it to be a busy first half of 2019, with the mid-market leveraged finance and corporate banking markets pressing on with deal activity, notwithstanding obvious macroeconomic headwinds.
In this edition, we highlight two topics that have caught our eye:
Super senior / unitranche | Mind the gap
The proportion of mid-market leveraged (and increasingly corporate) deals done on a super senior / unitranche basis has increased dramatically over the last few years. However, there are dangers in revisiting precedent deals and applying the intercreditor principles from those deals to future transactions in which the dynamics and the underlying credit may vary significantly. We highlight some of the areas of caution for super senior lenders, credit funds and even the borrower.
LIBOR | The state we're in
Replacement of the current LIBOR regime, in light of various rate setting scandals, has been well-publicised. But what progress has been made in relation to those changes, what is a 'SONIA-based' alternative and are borrowers sleep walking into the unknown when it comes to documentation? We explain the current state of play.