Market Trends 2023/24: Equity Cure Rights

Summary

This practice note provides an overview of equity cure rights contained in credit agreements and discusses current market trends in publicly filed credit agreements filed since the second quarter of 2023. Equity cure rights permit a holding company, sponsor, or other shareholder to make an investment in the borrower, thereby providing cash proceeds that allow the borrower to comply with financial maintenance covenants in the credit agreement and preventing or repairing a breach of those covenants.