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In Next Pandemic, Buyout Firms Want Reprieve in Debt Deals (1)

March 31, 2021, 3:44 PM

Private equity is already positioning for the next deadly virus.

Some buyout firms are seeking new terms in loan agreements to help their companies avoid defaults if earnings drop in a future pandemic, according to lawyers with knowledge of the discussions. They’re getting resistance from banks concerned the proposals allow borrowers too much flexibility and would scare away investors.

Fights over the fine print in credit agreements became particularly bitter during the Covid-19 outbreak, with companies strapped for cash as business withered. Those tensions are making creditors wary of giving away any bargaining power.

Proposed terms vary, but the ...