The English principle that a majority's power to bind a minority must be exercised in good faith for the class as a whole. Minority creditors have raised it against European LMEs.

A coordinated group of creditors, often holding a controlling position, that negotiates an LME with the company.

A covenant requiring maturity extension offers to be made ratably to all lenders, protected as a sacred right.

A covenant preventing a guarantor's automatic release merely because it stops being wholly owned, closing the route PetSmart used with Chewy.com.

An LME that depends on amending the existing debt documents with the required majority of creditors, as in an uptier. The label describes how the documents permit the deal, not its structural result.

The process by which a borrower or issuer asks lenders or noteholders to approve amendments to a credit agreement or indenture.

A private contract among creditors, without the company, under which signatories agree to negotiate and vote together in any restructuring or LME.

An LME implemented through capacity already in the debt documents, such as investment, debt and lien baskets, without any amendment or consent from existing creditors.

Under an intercreditor agreement, a realisation of collateral directed by secured creditors after acceleration or enforcement. It can release debt and security and has been used to implement European LMEs.

A rating-agency concept: an exchange made to avoid default or insolvency that gives creditors less than the original promise. Agencies usually treat it as a selective default.

A structure that gives participating creditors two claims against the same credit support, typically a guarantee from the credit group plus an intercompany loan from a non-guarantor borrower into that group.

A transfer of assets or value away from the obligor group, usually to an unrestricted or non-guarantor subsidiary, which then raises new debt secured on those assets and structurally senior to existing creditors.

A covenant limiting which investment baskets may fund investments in unrestricted subsidiaries, usually to one capped basket.

An offer to holders to swap existing debt for new instruments with different maturity, ranking or terms, often made alongside a consent solicitation.

A consent given by a holder as it exchanges out of an instrument, voting to strip covenants from the instrument it leaves, so that holding out becomes less attractive.

A third-party investor buys a company's discounted unsecured or subordinated debt in the secondary market, then exchanges it bilaterally with the company for new senior secured debt under a pre-agreed structure.

The creditors holding the voting threshold in an intercreditor agreement needed to direct the security agent, including on enforcement and distressed disposals.

A covenant barring transfers of material assets, originally intellectual property, to unrestricted subsidiaries and barring designation of asset-holding subsidiaries as unrestricted.

An out-of-court transaction, or series of transactions, that reshapes a stressed borrower's capital structure using flexibility in its existing debt documents, usually to raise liquidity, extend maturities or capture discount.

Treatment that departs from equal and ratable sharing among creditors of the same class, for example by offering only some lenders a priority tranche.

An exception to pro rata sharing that lets a borrower buy back loans. Serta relied on it for a non-pro rata exchange; the Fifth Circuit rejected that reading of Serta's credit agreement.

New debt that ranks equally with existing secured debt against the original credit group and also receives exclusive additional credit support, such as guarantees or collateral, from outside that group.

A covenant, found in a minority of bond indentures, barring an issuer from paying for consents unless the same consideration is offered to all holders.

An extension of the J.Crew blocker that bars transfers of material assets to any subsidiary that is not a loan party, not only to unrestricted subsidiaries.

Creating new debt that ranks ahead of existing debt, whether by lien priority, payment priority or structure.

Provisions requiring payments and recoveries to be shared ratably among lenders in the same class. Loans usually contain them; high-yield bonds generally do not.

Provisions that cannot be amended without the consent of each affected lender, or of all lenders, rather than the ordinary majority.

A covenant requiring each affected lender's consent to amendments that subordinate existing lenders in lien or payment priority. It may also limit open market purchases to ratable offers.

The lower priority of a claim against a parent compared with claims against its subsidiaries, whose creditors are paid from subsidiary assets before value reaches the parent.

An investment basket letting a non-loan-party restricted subsidiary reinvest proceeds it received from permitted investments. In J.Crew it moved trademarks to an unrestricted subsidiary beyond the investment capacity lenders expected.

A subsidiary designated outside the restricted group, so not bound by the covenants and usually not a guarantor. The status is contractual, not inherent, and varies between documents.

A transaction that reallocates recovery value among existing creditors: majority lenders amend the documents to create a priority tranche, exchange into it, and leave non-participating lenders subordinated.

The risk that a borrower moves value to an entity that is not a subsidiary at all, such as a joint venture, avoiding blockers drafted around unrestricted and non-guarantor subsidiaries.