Clifford Chance

Lean, Mean and Mezzanine

18 February 2010

As the leveraged finance market returns, mezzanine investors are taking a tougher stance – possibly as a consequence of lessons learned on restructurings over the last 18 months. A number of specialist mezzanine investors have produced lists of issues setting out the further protections that they require. The central themes running through these lists are a desire by the mezzanine investors both to limit the amounts which may rank ahead of them in a restructuring and to exert greater influence over any future restructuring negotiations or enforcement action. However, agreeing to such changes will come at a cost to other debt and equity investors.

Clifford Chance has prepared a briefing paper looking at a selection of some of the safeguards sought by mezzanine investors and considering their implications.

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