How Traveling Structures Work In Leveraged Finance

Law360, New York (January 4, 2013, 5:02 PM EST) -- Aggressive structures not seen since the leveraged finance bull market of 2006 have re-entered the market. Driven largely by best efforts deals, certain private equity sponsors have sought, and obtained in limited cases, so-called “traveling structures.”

These structures carve out a permitted change of control, i.e. a pre-baked approval for a post-closing sale of equity to eligible permitted purchasers, subject to satisfaction of certain conditions. This structure displaces the usual expectation of the lender syndicate that the credit facilities will be refinanced upon a change of...
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