Sponsor Purchases of Portfolio Company Debt: Key Considerations in an Uncertain Environment

14 May 2020
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Key takeaways:

  • In response to volatile economic and market conditions caused by the COVID-19 pandemic, many financial sponsors may now be considering investments in portfolio company debt.
  • Purchases of bonds and syndicated term loans by financial sponsors raise a number of important legal and practical considerations relating to U.S. securities, tax and bankruptcy laws, the relevant debt and fund agreements, and governance obligations that must be carefully considered in advance.