FICC Focus Credit Crunch: Proskauer’s Boyko on Outcomes in Private Credit
Mar 23, 2026
Stephen Boyko, partner and co-founder of Proskauer’s Private Credit Group, brings decades of finance and restructuring experience. He talks about how private credit docs evolved toward borrower flexibility. He covers covenant trends, lender protections against LME risks, EBITDA add‑backs and why defaults differ by industry and deal size. He also outlines monitoring, amendment patterns and the market outlook.
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Documents Evolved Toward Flexibility With LME Focus
- Private credit documents have shifted: borrowers often draft and sponsors select precedent grids, but lenders focus heavily on locking down incremental debt and distribution protections.
- Boyko notes private credit emphasizes flexibility for growth while requiring specific LME protections to prevent opportunistic recap moves.
Lock Down LME Protections Before You Lend
- Insist on specific LME protections as table stakes when underwriting private credit to avoid dilution by later recaps or dividend schemes.
- Boyko says his clients use grids and walk away if top LME holes (J.Crew, Chewy, CERTA) aren't closed.
CovLight Concentrated In Larger Deals Only
- Covenant-lite exists in private credit but is concentrated: ~20% of deals are cov-lite and over 90% of those have EBITDA > $50m.
- Across all deals the average headline leverage was 5.1x, though add-backs can push effective leverage higher.