Private Equity International | Covenant Breaches Trend Upward as GPs Navigate Uncertainty

Feb 2023

Originally posted by Private Equity International on February 22, 2023.

According to the Lincoln PMI (LPMI), private equity (PE) firms and their portfolio companies are becoming increasingly concerned about financial covenant breaches and debt maturity as market volatility continues. The LPMI also reported that while PE-backed companies are increasingly encountering covenant breaches, the figures remain below the peak COVID-19 pandemic levels; however, Lincoln predicts that number will continue to rise. Index findings also indicate that interest expense is increasing, leading all parties to use creativity when structuring deals to conserve capital and deliver investors with desirable returns.

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  • Richard Olson, Managing Director in Lincoln’s Valuations & Opinions Group, recently joined Private Equity International to discuss financial covenant breaches and debt maturity, based on findings from the Lincoln PMI, a key insight into private market performance.

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