Optimum Communications: Welcome to the Scorched Earth Era of Anti-Cooperation
Ian Feng, J.D. - Senior Covenant Analyst, Covenant Review
2 December 2025
Insights into Optimum’s provisions impose complete debt cancellation on cooperating lenders:
- Retroactive Prohibition Targets Existing Cooperation Agreements: Optimum’s provision uniquely prohibits lenders from participating in current and future creditor cooperation arrangements simultaneously.
- Complete Debt Cancellation as Punitive Remedy: Violating lenders face permanent forfeiture of all payment rights with obligations treated as no longer outstanding.
- Mandatory Compliance Reporting Framework: Lenders must confirm non-participation in cooperation agreements twice annually or lose access to all payments.
- Broader Coverage Beyond Direct Lenders: The provision extends to lenders’ affiliates, investment managers, and parties indirectly subject to cooperation agreements.
- Limited Syndication Success Despite Innovation: Anti-cooperation provisions have consistently been flexed out during syndication except in specialized contexts like Optimum’s transaction.
The Bottom Line™:
- Anti-cooperation provisions prevent creditors from forming blocs when negotiating with debt issuers. Recently, these provisions have gained notoriety as tools for controlling liability management negotiations.
- Notably, Optimum Communication’s unrestricted subsidiary credit facility, dated November 25, 2025, includes such a provision.
- Optimum’s provision goes further than prior iterations, particularly regarding potential consequences to creditors.
- This report reviews Optimum’s new credit agreement language. Additionally, we compare it to prior known anti-cooperation provision examples.
Overview
Cooperation agreements have risen to prominence regarding liability management transactions in recent years. Specifically, these agreements bind creditors together when negotiating with a debt issuer—ostensibly offering protection in numbers or inhibiting “creditor-on-creditor” violence. Notably, cooperation agreement terms vary widely. For instance, such agreements can require debt issuer approval from all signatories. Moreover, pro rata deals with the borrower or issuer may be mandated. Furthermore, signatories can be prohibited from “dealing away” from the group. In response, sponsors and debt issuers have acted. Consequently, they now implement language prohibiting cooperation agreements—called “anti-cooperation” provisions.
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