Corporate
May 21, 2019
Pulling back the curtain on closing leverage
Data shows that lenders in the upper-middle-market band of the private credit market target a closing leverage moderately inside six times, a trend which has appeared to continue in 2019.
Sandra Lee Montgomery
Partner
Proskauer Rose LLP
Email: smontgomery@proskauer.com
Sandra is a partner in The Private Credit Group. She represents first- and second-lien senior lenders, mezzanine investors, and equity sponsors in senior debt, mezzanine and private equity financing arrangements, particularly those involving private sources of capital. Her areas of focus include acquisitions, recapitalization and other leveraged financings, cash flow and asset-based financings, debtor-in-possession and exit financings, cross-border financings, unitranche and mezzanine financings, restructurings and other innovative, first-in-kind transactions.
Michelle L. Iodice
Associate
Proskauer Rose LLp
Michelle is an associate in The Private Credit Group. She concentrates her practice on complex financing transactions, including unitranche, first and second-lien, secured and unsecured mezzanine, holdco and other forms of private credit in connection with leveraged buyouts, acquisition financings and recapitalisations, among other purposes. She has experience representing a diverse group of lenders in transactions across a wide range of industries.
In 2013, the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency issued guidelines applicable to federally regulated financing institutions under the Interagency Guidance on Leveraged Lending. The guidelines came in response to the increased volume of "risky" leveraged finance transactions being entered into by these institutions. A key theme of these guidelines was that a company with leverage (or funded indebt...
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