A Review of Recent Anti-Liability Management Provisions in the U.S. High Yield Market
Anthony P. Canale, J.D. - Global Head of Research, Covenant Review
25 April 2025
High yield issuers have been engaging in liability management transactions for many years, but the frequency, complexity, and aggressiveness of these transactions has increased significantly over the last five years or so.
In particular, we’ve observed a significant number of high yield liability management transactions in recent years involving “uptiering,” “drop-downs,” and “double dips,” as well as transactions involving combinations and iterations of these three transaction structures.
In response to the increasing use of these liability management transaction structures, we’ve seen recent select deals adopt new anti-liability management provisions that are designed to prohibit (or at least mitigate the risk of) new liability management transactions
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