medium · Corporate Credit Analysis covenants
In a well-known creditor-on-creditor move, a company transfers its valuable trademarks and brands to an 'unrestricted subsidiary' that is not bound by the existing bond covenants. It then uses these brands as collateral for a new loan. This tactic is specifically referred to as:
- The Serta Uptiering
- The Chewy Drop-Down
- The J.Crew Manoeuvre
- A Leveraged Recapitalization
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