Market Alert: It’s Baaaaack – Anti-Cooperation Returns to BSL Syndication
Ian Feng, J.D. - Senior Covenant Analyst, Covenant Review
14 November 2025
Insights into anti-cooperation provisions reshaping creditor rights in leveraged finance—examining the strategic intent, mechanics, market evolution, and implications of language designed to prevent lenders from organizing collectively:
- Anti-Cooperation as Issuer Defense Strategy: Debt issuers deploy provisions specifically designed to limit or prohibit creditor cooperation arrangements as a method to control liability management negotiations and restrict organized creditor response.
- Disenfranchisement Mechanics and Vote Suppression: Lenders who enter cooperation agreements face effective disenfranchisement under these provisions, with their voting rights eliminated and votes automatically allocated in proportion to non-cooperating lenders.
- Market Evolution and Flexing Dynamics: Anti-cooperation language has repeatedly emerged in broadly syndicated loan transactions since late 2024 but faced vociferous buy-side rejection, leading most sponsors to flex the provisions out during syndication stages.
- Definitional Scope and Contractual Breadth: The cooperation agreement definition encompasses any boycott, cooperation, support, lock-up, coordination, voting or similar arrangement, creating expansive restrictions without narrow limitations on prohibited activities.
- Enforcement Uncertainty and Documentation Questions: The provision appears in marketing materials with unresolved questions about final documentation form, potential breach of contract claims, and whether such restrictions will survive the term sheet stage.
The Bottom Line™:
- Anti–cooperation provisions in debt instruments designed specifically to prevent creditors from forming blocs or otherwise organizing—largely as a method by debt issuers to control liability management negotiations.
- While the provisions have historically been rejected within the broadly syndicated loan (“BSL”) market, borrowers and sponsors have continued to push the language in new deals.
- Anti–cooperation has appeared again in one recently launched BSL deal. In this report we assess the language and compare it to prior formulations.
Overview
Much has been written about cooperation agreements over the past year, as they gain ever increasing prominence as a primary (some would argue only) creditor-side tool available against sponsor / borrower overreach during liability management transactions. Much has also been made of the debt issuers’ response to such arrangements, particularly in their attempt to ram through anti-cooperation provisions in their deals (see, for example, our Market Alert: Anti-Cooperation Language Debuts in the US BSL Market).
In this report, we take a look at another such anti-cooperation provision that appeared in a recently launched BSL transaction. (Unfortunately, the name of the transaction must at this time remain undisclosed; as the deal is
currently in market, it is subject to certain confidentiality requirements.)
A quick history
Cooperation agreements are contracts signed by creditors to a particular company where subject parties agree to organize at some level when negotiating with a debt issuer.
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