McGuireWoods London partners Lee Cullinane, Marc Naidoo and Linn Mayhew were part of the working group that drafted “Guide for Company Advisers to ESG Disclosure in Leveraged Finance Transactions.”
Published by the European Leveraged Finance Association in conjunction with the Loan Market Association, this guide is a practical tool for company advisers that sets out best practices on integrating environmental, social and governance (ESG) information into loan documentation, offering memoranda and ongoing company reporting requirements.
In particular, the guide discusses: (i) why leveraged finance investors need more disclosure on ESG topics; (ii) regulatory considerations for borrowers; (iii) diligence practices in high-yield bond and leveraged loan transactions; (iv) drafting considerations and a roadmap for incorporating ESG disclosure into transaction documents; and (v) contractual provisions and other considerations in leveraged loans.
The main topics covered in the guide were discussed at a November 2020 ESG workshop, which Cullinane, Naidoo and Mayhew helped moderate. Workshop attendees included lawyers, debt providers, private equity sponsors, credit rating agencies, senior fund managers and trade associations.