This website uses cookies. By using this website, you agree to our Cookie Policy.
A Key Pitfall of Restricted Subsidiaries in Loan Agreements
Reprinted from: Law360 | April 16, 2024Cadwalader partner Jared Zajac and David Ebroon, JPMorgan Chase’s Legal Head of Capital & Advisory Solutions, have co-authored an article, “A Key Pitfall of Restricted Subsidiaries in Loan Agreements,” which appeared in Law360.
The article discusses how companies negotiating loan terms with its lenders will typically apportion obligations and restrictions among various categories in their corporate family — most commonly referred to as loan parties, non-loan party restricted subsidiaries and unrestricted subsidiaries.
Over the past several years, the most aggressive liability management transactions have utilized unrestricted subsidiaries as the cornerstone for such transactions. As sponsors and borrowers, however, expand their playbooks and devise more creative transactions, non-loan party restricted subsidiaries have garnered more attention.
Read it here.
