COVID-19 and the Credit Cycle: WHITE PAPER LEVERAGED LOANS The Value of Reviewing Your Loan Documents Now2 Table of Contents 1. 2. 3. 4. 5. 6. 7. 8. Market backdrop Methodology Covenant package and covenant level analysis Equity cure rights Limiting cash leakage: mandatory prepayments Adressing maturity risk: amend-to-extend clause Transfer restrictions ConclusionEXECUTIVE SUMMARY This year the leveraged loans market has faced a major market dislocation caused by the policies enacted to combat the spread of COVID-19. With pressure on borrowers’ revenues and earnings from the lockdown measures, there is a potential for an increase in the loan defaults in the near term. In the longer term, the pronounced shift in the economic environment caused by the pandemic may trigger the next

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