pandemic

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Innovative asset-based lending is on the rise as a means of attracting new lenders while maintaining the strategic support of existing creditors.

By Francesco Lione, David Walker, Tom Evans, and Catherine Campbell

Raising fresh capital for portfolio companies in times of financial stress is always a delicate balancing act between attracting new lenders and maintaining the strategic support of existing creditors. The almost instantaneous halt in cash flows and scramble for new capital injections precipitated by the COVID-19 pandemic has significantly changed traditional approaches to collateral — giving rise to new financing opportunities for sponsor-backed deals and businesses. Regardless of debt market buoyancy, these new financing techniques are here to stay, having demonstrated value in overcoming creditor scepticism during times of economic uncertainty and bringing a new way to increase leverage.

As IT vendors grapple with the impacts and risks of COVID-19, how can customers manage exposure when contracting for new services?

By Alain Traill, Christian F. McDermott, and Andrew C. Moyle

COVID-19 has — temporarily or otherwise — disrupted the status quo. For IT vendors the situation is no different, with many being forced to dust off their contracts and seek relief under force majeure provisions. So, where does this leave customers that are seeking to enter into new IT service arrangements, but find themselves faced with pushback from increasingly risk-averse vendors (not just in terms of COVID-19, but also future COVID-19-type scenarios)?

The question of where risk should lie is becoming a new battleground in negotiations. This post focuses on the customer’s perspective, setting out some key steps that customers can take to help achieve a balanced contract.