The rise of the liquidity covenant in leveraged and corporate loan documentation: is cash “King” once again?


In this In Practice article Donald Lowe, Fiona Swords and Michael Leadbeater examine the rising use of liquidity tests to help parties navigate the difficult financial conditions prompted by the COVID-19 pandemic.

Often introduced at times of disruption or distress, aligning the mechanism to the particular patterns of a business' cashflow is crucial and requires careful negotiation. This article first appeared in the October 2020 edition of Butterworths Journal of International Banking and Financial Law.

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