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Our four-part multimedia series, "High-Yield Bonds
in Asia: What Every Issuer Needs to Know," offers
practical insights on high-yield debt for Asia-based issuers
seeking to understand important covenants and trends.
Part 1: Overview
Since the Asian financial crisis of the late 1990s, the
region's high-yield debt capital markets have expanded
dramatically. And during the past several years, amid an expanding
global economy, issuance volumes have hit record levels, with
exciting changes in deal structures and covenant packages.
In this first video of our "High-Yield Bonds in Asia - What
Every Issuer Needs to Know", partner Jason T. Elder
provides a snapshot of the high-yield bonds market in Asia and
discusses the purpose of high-yield bond covenants.
Part 2: General Principles of a High-Yield Covenant
Package
High-yield bonds are complex debt instruments with tailored
covenant packages. Understanding how these covenants work and how
to tailor a covenant package is essential to ensuring the issuance
of cost-effective high-yield debt that does not restrict the
ability to expand a growing business.
In this video, the second in our series on "High-Yield
Bonds in Asia - What Every Issuer Needs to Know," Mayer Brown
partner Jason T. Elder explains how covenants work and how to
structure a tailored covenant package by illustrating the
"credit group" concept, the general principles for a
high-yield covenant package and the issue of structural
subordination.
Part 3: Limitation on Indebtedness Covenant
Understanding how debt covenants work and how to navigate them
ensures that a high-yield bond is tailored to the needs of both
investors and the issuer.
In this third video of our series "High-Yield Bonds in Asia
- What Every Issuer Needs to Know," Mayer Brown partner Jason
T. Elder discusses one of the most important covenants, the debt
covenant, including its purpose, ratio debt and permitted debt
exemptions.
Part 4: Restricted Payments Covenant
In this fourth and final video of our series, Mayer Brown
partner Jason T. Elder explains the restricted payments covenant,
how the net income basket is calculated, when it is used and how
issuers comply with a restricted payments covenant when paying
dividends or making investments outside the credit group.
Mayer Brown is a global legal services organization
comprising legal practices that are separate entities (the Mayer
Brown Practices). The Mayer Brown Practices are: Mayer Brown LLP, a
limited liability partnership established in the United States;
Mayer Brown International LLP, a limited liability partnership
incorporated in England and Wales; Mayer Brown JSM, a Hong Kong
partnership, and its associated entities in Asia; and Tauil &
Chequer Advogados, a Brazilian law partnership with which Mayer
Brown is associated. "Mayer Brown" and the Mayer Brown
logo are the trademarks of the Mayer Brown Practices in their
respective jurisdictions.
This article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
discussed herein. Please also read the JSM legal publications
Disclaimer.
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