Covenant Lite
Covenant-lite debt has limited financial maintenance testing but can retain extensive incurrence covenants, reporting duties, and defaults.
Leveraged, mezzanine, and unitranche credit structures allocate repayment, priority, collateral, control, and return across higher-risk corporate debt.
Leveraged, mezzanine, and unitranche credit finances companies or transactions with elevated leverage, subordinated risk, acquisition exposure, or complex lender priorities. The relevant question is not simply how much a borrower owes, but whether cash flow can service and reduce debt under realistic downside conditions.
Leveraged finance describes the broader financing market and capital structure. A leveraged loan is a higher-risk institutional loan, while a senior bank loan focuses on senior contractual priority.
Mezzanine finance adds subordinated or equity-linked capital below senior debt. Unitranche debt combines several risk layers into one borrower-facing facility, often with a separate lender-side waterfall. Covenant-lite describes limited maintenance testing, not an absence of contractual restrictions.
Compare the complete capital stack, definitions of debt and EBITDA, cash interest, maturities, amortization, collateral, guarantees, covenants, intercreditor terms, and downside recovery. These pages provide general financial education, not a recommendation to borrow, lend, or invest in leveraged credit.
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Covenant-lite debt has limited financial maintenance testing but can retain extensive incurrence covenants, reporting duties, and defaults.
Leveraged finance provides higher-risk corporate debt for acquisitions, buyouts, recapitalizations, refinancing, and growth.
A leveraged loan is institutional credit to a highly leveraged or lower-credit-quality borrower, commonly with floating-rate and senior secured terms.
Mezzanine finance provides subordinated or equity-linked capital between senior debt and common equity in a capital structure.
A senior bank loan is corporate debt that ranks ahead of specified junior obligations and is often secured by first-priority collateral.
Unitranche debt combines senior and junior credit risk in one borrower-facing facility, often with a separate lender-side payment waterfall.