LongHaul Posted April 19, 2019 Share Posted April 19, 2019 Does anyone have any knowledge or experience with the risk of bank debt and covenants? The reason I ask is that it seems like bank debt can be very risky. If a company has value greater than the debt but a temporary downturn in earnings, from any number of things, the banks can just put the company into bankruptcy upon violation of covenants. If aggressive vulture funds buy the bank debt and want to own the company then they could use the covenant violations as an excuse for putting the company into bankruptcy and trying to convert to equity. I am very interested in any experiences or knowledge on this subject. Link to comment Share on other sites More sharing options...
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