Attack on the Make-Whole

Recently, make-wholes have come under attack from a number of directions in the international financial markets.

Baker McKenzie’s Rob Mathews, Ben Bierwirth, Peter Goodman, Andrew Riccio and Lisa Nielsen-Board consider how a relatively innocuous feature of corporate bonds is causing a stir due to recent litigation and new regulations – with a focus on three challenges and their potential implications:

• High yield issuers circumventing make-whole payments by voluntarily defaulting
• US court rulings on the enforceability of make-whole claims in a US bankruptcy proceeding
• Whether a make-whole provision turns a corporate bond into a Priip

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