Sacred rights are in this season

Credit managers & capital markets advisors, pay attention 📢 📢 📢 —this trend shows markets are getting worried…

In ALL of 2023, only 38% of publicly filed high yield credit agreements protected lenders against lien subordination with sacred rights terms.

That number stayed consistent for most of 2024, until it spiked recently: in Q4 ’24, it jumped to 64% of deals including such protections. 🤯🤯🤯

Here's the takeaway: lenders are becoming scared of priming debt transactions, signaling that market sentiment is shifting to downside protection.

Early signals in capital markets tend to forecast broader macro sentiment and paying attention to these trends early is a major informational advantage.