Protecting against a collapsed lender

Campbell, David; Hrydziuszko, Derek
May 2009
Journal of Corporate Treasury Management;May2009, Vol. 2 Issue 3, p265
Academic Journal
The crisis in the international banking market of autumn 2008 — the bank bailouts, the collapse of Lehman Brothers and the Icelandic banking nationalisations — shone a light on something not previously dealt with in corporate loan documentation: what happens if a syndicate member goes bust and/or defaults on its obligations? This paper looks at what happened to Lehman, how that affected borrowers (and others) in Lehman's deals, and how a borrower might try to protect itself in the future against a failure of a member of its bank syndicate.


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