Practical Law, the online resource for legal information, hosted a webinar reviewing the latest trends in loan terms for large cap and middle market loans.
This webinar and related materials are a valuable view into how the reported credit tightening is reflected in credit terms.
My takeaways of trends in middle market loans are:
- Non-bank lenders (such as BDCs) presence continues to grow responding to receding bank presence.
- Unitranche lending got a boost from the Radioshack decision which upheld provisions of the Agreement Among Lenders (AAL) of which the borrower is not a party.
- Know Your Customer (KYC) procedures at lenders have not yet been standardized resulting in a timing wildcard. Advice is to address the process early on in the loan negotiations to reduce a last minute surprise.