"Covenant Lite" Credit Facilities in European LBO Refinancings

Cleary Gottlieb represented lead arrangers Citigroup, Deutsche Bank and Goldman Sachs on the innovative “covenant lite” revolving credit facility for Unity Media in connection with its €1.5 billion refinancing and acquisition of the Bundesliga broadcasting franchise.

Cleary Gottlieb also represented Grohe Holding GmbH in a “covenant lite” senior revolving credit facility in connection with its €1.3 billion refinancing.

Unlike typical revolving credit facilities, these did not have regularly tested “maintenance-style” financial covenants but instead had “incurrence-style” covenants. This is a novel type of financing recently imported into Europe from the United States.