Leverest publishes Deep Dive Paper on the ECB interest hike and contractual interest rate hedge obligations

Frankfurt/Berlin, Germany – Due to recent monetary policy measures by the European Central Bank, Leverest decided to publish a deep dive paper on the interest rate hike and contractual interest rate hedge obligations which sometimes have been implemented in leveraged finance transactions and are now coming to life. European leveraged loans typically are instigated as floating rate instruments paying a Euribor base rate that resets on a regular basis (e.g., every 3 months), plus a spread that offers lenders compensation against embarked credit risk. 

Leverest’s deep dive article reviews the interest rate hedging trends in the leveraged finance market and captures some of the critical themes in associated contractual interest rate hedge obligations.

A sneak-peek into what we have covered in our Deep Dive: 

  • Analysis of current macro environment and contractual effects of accelerated interest rates within the leveraged finance ecosystem
  • Insights into subtle interest rate hedge obligations and variable interest rate loans in acquisition financings and refinancings of PE-led portfolio companies
  • Expertise shared on the downside protection possibilities and otherwise hard-to-access info on different financial instruments such as interest swaps and caps to manage volatility of interest expenses
  • Necessary checkpoints for PE Investors and Borrowers

To read the full article click here.

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