easy · Corporate Credit Analysis
In the event of a maintenance covenant breach, which of the following is a common 'remedy' that allows a sponsor to avoid a default?
- Issuing more debt to pay down the existing principal.
- Increasing the interest rate on the debt voluntarily.
- Exercising an 'equity cure' right by contributing new cash to the borrower.
- Switching the debt from a maintenance structure to an incurrence structure.
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