A group of investors that lent to a data-backup company scored an unusual coup just before Christmas: a seat on its board.
That stands out in a roaring credit market where lenders have resigned themselves to low returns and vanishing protections against companies’ stumbles.
When it came to Sungard Availability Services, investors seized on a fumbled loan refinancing earlier in 2017 to gain the concession. They also got one of the highest interest rates seen last year.
Getting the board seat was a move straight from the activist equity investor playbook. It could come in handy as money managers prepare to confront the prospect of rising interest rates for companies propped up by years of open credit markets. That’s especially true for firms with the highest debt loads that are more vulnerable to a souring business environment.
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https://www.bloomberg.com/news/articles/2018-01-05/leveraged-loan-investors-score-an-activist-manager-style-coup