In the article, Naidoo explained how market and industry volatility has pushed sponsors to go above and beyond to convince financiers that potential financing would pass internal credit and risk reviews. He also explored sponsor considerations when approaching ESG deals through “de-risking.”
“Sponsors have an even greater choice of potential financiers, including more risk averse financiers that are enticed by the prospect of growing their ESG portfolio,” Naidoo wrote. “Without getting themselves into a precarious situation with aggressive financiers, sponsors are faced with risk averse financiers who would like to do ESG deals but at an acceptable credit limit.”
Naidoo, a debt finance partner, is a member of the five-person executive committee leading McGuireWoods’ ESG task force.