Counsel for the private debt that banks no longer write: unitranche and senior facilities and sponsor and non-sponsor deals, documented and negotiated by a team that knows where the covenant package will be tested.
Private credit is lending without a bank in the middle. A fund or a small club originates the loan, negotiates it with one borrower and holds it to maturity. That removes the syndicate, and it puts everything on the document: there is no market to exit into and no agent to hide behind, so the credit agreement and the collateral are the whole of the deal.
The protection sits under the ratios. A debt-to-EBITDA covenant is only as tight as the add-backs it permits, and a direct-lending deal usually still tests it every quarter, where a syndicated term loan might test nothing at all. In a unitranche the first-out and last-out split sits in an agreement among lenders the borrower never signs.
We act for credit funds and direct lenders, and for the sponsors and companies they finance, never on both sides of the same deal. The deal is held, so every concession is held too.
Senior, unitranche, and stretch-senior term loans for buyouts, acquisitions, and growth, including the commitment papers, credit agreements, and the agreement among lenders that allocates priority and enforcement control behind the single blended rate.
Financings for private-equity-backed borrowers and for founder- and family-owned businesses alike, with diligence, covenant packages, and governance and information rights calibrated to the presence or absence of a financial sponsor behind the credit.
Drafting and negotiating the credit agreement that governs the loan, from the debt-to-EBITDA and coverage tests to the add-backs, baskets and cure rights beneath them, where the language under the ratios sets the real protection.
Security packages, guarantees, and the intercreditor and subordination arrangements, including the agreement among lenders in a unitranche, that decide who is paid first and who controls enforcement when a credit is under stress.
The conversations that follow a closing, including covenant resets, waivers, additional capital, and restructurings of a held loan, handled with the restructuring team on the file from the start, before distress has hardened.
Aligning a facility with the credit fund that holds it and the subscription or NAV lines that finance the fund, and coordinating security and enforcement across borders with locally admitted counsel where collateral sits in another jurisdiction.
A held loan usually comes with monthly management accounts, a quarterly compliance certificate signed by an officer and an annual budget at the start of each year. A missed delivery becomes a default after a grace period of 30 days or less, and it is often the first sign that the quarter has gone wrong.
For a software borrower without earnings, a direct lender may test debt against annualized recurring revenue and require minimum liquidity instead of an EBITDA ratio. The agreement names a flip date, often two or three years in, when the covenants convert to EBITDA, ready or not. That date is negotiated as hard as the rate.
In a unitranche the first-out and last-out lenders split the waterfall, the votes and the right to run an enforcement in an agreement among lenders. The borrower is usually not a party, so bankruptcy courts have questioned whether they can rule on it, and lenders increasingly ask the borrower to acknowledge it for that reason.
Without a sponsor behind the credit, a lender wants what a bank would have wanted: a validity guarantee from the owner, key-person and change-of-control defaults, and monthly rather than quarterly reporting. Pricing runs wider, and the equity cure is often absent because there is no fund to write the check.
A direct lender prices a held loan on being held, so prepayment carries a premium, often a make-whole in year one and two percent and one percent in the years after, with carve-outs for a sale. A syndicated term loan offers six months of soft call; a private loan can charge for three years.
Because a fund or a club holds the loan, a waiver needs a few signatures rather than a syndicate vote, and a private-credit workout usually ends in a reset. The price is an amendment fee, a wider margin or a toggle that pays interest in kind, so principal grows while the covenant is on holiday.
Commitment papers set the blended rate while the first-out/last-out economics are settled lender-side in the agreement among lenders, with priority, waterfall, and enforcement control divided before the borrower reads a draft credit agreement.
The long round is fought under the ratios: EBITDA add-backs, pro-forma adjustments, baskets, and equity-cure mechanics. On a held loan every concession compounds for the life of the facility, so the language is negotiated on the assumption that it will be tested.
Guarantees and the collateral package close alongside the loan, with security agreements, control agreements, pledges, and filings perfected under UCC Article 9, and with cross-border collateral coordinated through locally admitted counsel before a dollar funds.
Maintenance covenants tested each period keep the lender at the table through compliance certificates, waivers, resets, and incremental capital, and, if performance slips, through a negotiated workout run under the standstill and cure rights drafted at closing.
There is no market to exit into. The document is the exit.
Private credit is lending by non-bank institutions, meaning credit funds, business development companies and insurers' debt arms, made directly to a borrower rather than through a syndicated bank loan or a bond. Direct lending is its largest form: a fund or a small club originates the loan, negotiates it with the borrower and holds it to maturity. There is no rating, no public disclosure and no secondary market to speak of, so the credit agreement and the collateral package are drafted for the lender that will still own them on the day they are tested.
A unitranche blends what would otherwise be senior and subordinated debt into a single facility at one blended rate, documented under one credit agreement. The tranching is handled privately between the lenders through an agreement among lenders (AAL) that the borrower often never sees, which determines who is paid first and who controls enforcement. That allocation of priority and control is where the real negotiation sits, and it is drafted with the same care as the headline economics.
Both, and never on opposite sides of the same deal. For credit funds and direct lenders the work runs from the term sheet and the agreement among lenders through the collateral package and the compliance certificates that follow. For sponsors and companies raising private debt it is the definitions, the baskets and the cure rights that will govern them for the life of the loan. Knowing what a lender's form usually concedes, and what a sponsor's counsel usually asks for, is most of the value in the first week of negotiation.
Sponsor deals finance a borrower owned by a private equity firm, where the sponsor is a repeat counterparty with its own form and a deep equity cushion. Non-sponsor deals lend to a founder- or family-owned business with no financial sponsor behind it, which changes the diligence, the covenant package, and the governance and information rights a lender needs. We structure both, and the documentation is written for whichever one it is.
Most direct-lending facilities still carry maintenance covenants, typically a debt-to-EBITDA ratio and a fixed-charge or interest coverage ratio, tested quarterly on a trailing twelve-month basis whether or not the borrower has done anything. A breach is an event of default unless cured, and the equity cure is rationed, commonly to two quarters in any four and five over the life of the loan, with the cure amount counted as EBITDA rather than as debt repaid. The definitions beneath the ratios, above all the add-backs the EBITDA definition permits, decide how much room those numbers really give.
Because the lender holds the loan and knows the borrower, distress is usually handled through a negotiated amendment or workout, since there is no market to exit into. We advise on waivers, covenant resets, additional capital, and, where it comes to it, the enforcement and intercreditor mechanics that decide outcomes under stress, and we coordinate with our restructuring team and with locally admitted counsel where collateral or proceedings sit in another jurisdiction.
Senior, unitranche, and mezzanine debt for acquisitions, buyouts, and recapitalizations, with the commitment papers, credit agreements, and covenants that have to survive diligence and a downturn alike.
Explore →Growth-stage debt for venture-backed companies, with term loans and facilities alongside the equity round, structured around runway, warrants, and the milestones the business is built on.
Explore →Revolving and term facilities secured against receivables, inventory, and other working-capital assets, with the borrowing-base mechanics and collateral controls that govern availability.
Explore →Reviewed by Jonathan D. Herpy, Sr., Senior Partner · Last updated October 2026 · Educational overview · Not legal advice
One partner is accountable for the whole matter, and you have that partner's direct line. Chicago, London, and Dubai work to the same standard.