"Stonegate Blocker" Ropes In Asset Sale LMTs
Alastair Gillespie, J.D. Senior Covenant Analyst
- Covenant Review
17 February 2026
- How the Stonegate blocker attempts to restrict asset sale dropdowns and protect bondholders.
- Which carveout provisions weaken the blocker and create potential loopholes for issuers.
- What strengthened application of proceeds requirements mean for controlling asset sale proceeds.
- How complementary covenant terms reinforce the blocker to limit liability management transactions.
- Why this blocker matters for managing structural subordination risk in distressed scenarios.
The Bottom Line™
Stonegate and Pfleiderer sold valuable assets to Unrestricted Subsidiaries. This approach bypassed their limited investment capacity constraints.
Maxeda’s restructuring introduces a blocker targeting asset sale transactions. The blocker aims to regulate these liability management techniques.
Asset transfers exceeding certain thresholds outside restricted groups are prohibited. However, exceptions exist for legitimate business purposes and third parties.
Subjective carveouts allow issuers to interpret provisions quite narrowly. Additionally, investors must challenge questionable transactions after they occur.
Strengthened application requirements govern how asset sale proceeds are used. Market participants may find this approach useful despite inherent limitations.
Fill out the below form to view the full article:
Please note that we can only respond to valid business email addresses and the interview is already available to clients.
Recently Published
Research
AllCovenant-ReviewAutosUS CR Quarterly Q1SovereignsBasicLevFin-InsightsTelecommunicationsMay GMUSeptember GMUFinancialsCreditSights-ResearchUtilitiesCase StudiesUS LME in Focusshow-homeshow-initiation page-homeMunicipalsSLRsOctober GMUTMTAsset Management ResourcesPharmaceuticalsJune GMUAsia in Focus Preliminary 2027 OutlookEnergyResearchGaming/LeisureWebinar Related ResourceVMED WebinarIndustrialsPoliticsMediaUS Special Sits OutlookBankruptcy 4Q26ConsumerTariffsSpecial SituationsEuro Autos: Barbarians at the GatesThe AUD Bond MarketCorporatePrivate CreditAerospace/DefenseU.S. Autos Expert PanelEMEA CR Quarterly Q3CovenantsBondsReal EstateEU Special Sits OutlookStrategyPost PetitionServicesJuly GMUESGChemicalsIranAsia in Focus 2H26ESG-HomeEmerging MarketsBanksEM OutlookOutlooks-HomeTransportationConstructionEMEA CR Quarterly Q2TechnologyInsuranceAsia in focus webinarUS CR Quarterly Q2ManufacturingEMEA CR Quarterly Q1Global Credit for ME Investors
Metals: Brazil Volatility Creates Opportunities
Metals: Brazil Volatility Creates Opportunities
Read More
US Insight: BSL prices and par-plus share drop to 1.5-year low last week; distressed ratio touches new post-Covid high
US Insight: BSL prices and par-plus share drop to 1.5-year low last week; distressed ratio touches new post-Covid high
Read More
US Market Commentary: Private credit defaults moderate to 2.41% in Q3, per Proskauer data
US Market Commentary: Private credit defaults moderate to 2.41% in Q3, per Proskauer data
Read More
US Bankruptcy: Gibson Dunn and Davis Polk lead creditor coalition alliances in chapter 11 – Bankruptcy Data Insights