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Investors exposed as risky ‘cov-lite’ loans soar in Europe

Covenant-lite debt now accounts for nearly four-fifths of leveraged lending in Europe, according to S&P

Investors exposed as risky ‘cov-lite’ loans soar in Europe

The value of ‘covenant-lite’ loans — those with weak to no investor protections — issued to highly-indebted European companies more than doubled last year, FN's sister publication Private Equity Newsreports.

Covenants are terms in loan contracts, such as provisions governing borrowers’ ability to take on more debt, which protect investors from changing market conditions that could leave debtors unable to repay.

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