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In response to the increased frequency of majority-backed debt restructuring transactions that have significantly disadvantaged minority debtholders, lenders in the syndicated loan market have increasingly turned to cooperation agreements among themselves as a means to mitigate the risk of exclusion from such deals. While often effective, this approach has been met with hostility from the sponsor community, and may inhibit a lender's ability to freely manage and trade its loan position.
Crowell's Bob Waldner recently published an article on this topic titled "An Overview of the Use of Cooperation Agreements Among Lenders in the Syndicated Loan Market" in The Review of Banking & Financial Services. In the article, Bob describes the elements of a typical cooperation agreement, considers some of its advantages and disadvantages, and discusses sponsors' evolving response to these arrangements.
The Review of Banking & Financial Services, according to the publication, consists of articles on current topics in securities, commodities, or banking law that are written by outstanding practitioners in the field.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
