Typically referring to a loan which has a Financial Covenant (generally Net or Gross Leverage covenant), but the covenant is quite permissive, ie the maximum threshold is very high compared to the actual leverage of the company at the moment when the financing was put in place.
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Learn more about covenants in our Legal Primer: Safeguarding Credit Quality and Asset Value. In this webinar, Apostolos Gkoutzinis, Head of EMEA Capital Markets and Co-Head of European Leveraged Finance, Milbank LLP explains the principal techniques to safeguard the restricted group in leveraged finance and high-yield documentation.