In one of the more profound shifts in leveraged loan covenant protection, the percentage of leveraged loans that waive excess-cash-flow recapture reached an all-time high of 42% in the first quarter of 2015.

This is, managers say, a relevant data point. After all, a decade ago most loans required that 75% of excess cash flow be used to prepay the debt. For these loans, a trigger that reduced the level to 50% was common.

In recent years, however, a 50% sweep has become market standard. – Steve Miller

This chart is taken from an LCD News story, available to subscribers here, that also details

• Covenant-lite loan outstandings
• Distribution of loans by cash-flow sweep
• Distribution by number of financial covenants

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