‘Having a seat the table’ during a live LME and obtaining favourable terms is exactly the position lenders want to be in. But the 2020 uptier of Serta Simmons loans underlines that sometimes, it pays to be on the outside looking in.
Today we’ve reported on how much each CLO that participated in the LME will have to pay as part of the litigation award. Get the recording from 9fin’s webinar, hosted by our head of LMEs Jane Komsky alongside DLA Piper, as we unpacked what’s in store for Serta lenders. Ahead of that, we looked at some of the implications for CLO investors.
This follows a ruling on 7 July by Judge Christopher Lopez which stated that lenders who participated in the uptier breached the pro rata sharing provision in the underlying credit agreement. He awarded $261.13m in damages, plus 9% prejudgment interest running from 22 June 2020 to be paid to the excluded lenders — that amounts to somewhere in the region of $450m. Read 9fin’s analysis here.
Pre-uptier, Serta had a $1.9bn TLB which had plentiful support from the CLO community — 9findata shows around $551m of the TLB was held by...
