High-yield bonds are complex debt instruments with tailored covenant packages. Understanding how these covenants work and how to tailor a covenant package is essential to ensuring the issuance of cost-effective high-yield debt that does not restrict the ability to expand a growing business.
Our four-part multimedia series, “High-Yield Bonds in Asia: What Every Issuer Needs to Know,” offers practical insights on high-yield debt for Asia-based issuers seeking to understand important covenants and trends.
In our last video, we provided an overview of high-yield bonds in Asia and discussed the advantages and purpose of high-yield bonds. In this video, the second in our series on “High-Yield Bonds in Asia - What Every Issuer Needs to Know,” Mayer Brown partner Jason T. Elder explains how covenants work and how to structure a tailored covenant package by illustrating the “credit group” concept, the general principles for a high-yield covenant package and the issue of structural subordination.