Market Alert: New Language on Integrated Transactions Could Give Borrowers Significant Flexibility in Litigation Challenging LMTs
Kevin Grondahl - Covenant Analyst, Covenant Review
16 January 2026
- How recent court rulings diverge on integrated transaction doctrine in liability management disputes.
- What emerging credit agreement language means for borrower control over transaction step ordering.
- Why lenders should resist provisions allowing borrowers to determine integration versus sequential treatment.
- Which litigation precedents matter when evaluating substantially concurrent transaction structures in loan documents.
- Where aggressive sponsor strategies are heading in structuring flexibility for future LMT transactions.
Executive Summary
Recent credit agreements include language addressing treatment of substantially concurrent transaction structures. This provision determines whether multiple transactions constitute integrated or separate sequential steps.
Courts have applied different standards when evaluating integrated transaction doctrine in recent cases. Judicial approaches diverge on whether concurrent transactions should be considered collectively or separately.
New contractual language permits borrowers to elect how substantially concurrent transactions are classified. Borrowers may designate whether events occur as integrated transactions or sequential ordered steps.
However, judicial deference to such borrower-friendly provisions remains uncertain in future litigation scenarios. This flexibility could significantly reshape how sponsors structure future liability management approaches.
Aggressive sponsors seek to preemptively eliminate common lender arguments before disputes arise. Nevertheless, market developments continue as parties test boundaries of permissible transaction structuring.
