Hellman & Friedman in Ground-breaking “Covenant Lite” Gartmore Refinancing
May 17, 2007
Cleary Gottlieb advised long-time private equity client Hellman & Friedman on the refinancing and recapitalization of Gartmore Group Limited, a leading UK investment manager, and the associated corporate restructuring.
The refinancing, which closed on May 17, represents one of the first successful European-style “covenant lite” deals. These debt financings, which have become common in the U.S. private equity financing market, contain no (or very limited) financial maintenance covenants in the senior credit agreement and less restrictive negative covenants, providing the borrower’s group with greater operational flexibility. Cleary Gottlieb had advised Hellman & Friedman on Gartmore’s 2006 acquisition, which was at the time the largest buyout in the asset management industry.