The Insight by Oaktree Capital Navigating LMEs with Armen Panossian, Ronnie Kaplan, and Ross Rosenfelt
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Feb 13, 2025 
Join Armen Panossian, Co-CEO and Head of Performing Credit at Oaktree, along with Ronnie Kaplan, a Portfolio Manager for U.S. Senior Loans, and Ross Rosenfelt, a Managing Director and Restructuring Lawyer. They discuss the rising prominence of Liability Management Exercises (LMEs) and their benefits over traditional bankruptcy. The trio delves into the complexities of debt restructuring, uptier transactions, and the delicate balance between lender strategies and borrower assistance, all while navigating a volatile credit landscape.
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Co-op Effectiveness
- Co-op agreements unite creditors, preventing borrowers from dividing and conquering them with side deals.
- They are effective in preventing up-tiers but less so against dropdowns where third parties finance assets.
Joining Co-ops
- Joining a co-op is generally advisable to have a seat at the table during negotiations.
- Co-ops with longer durations, extending to debt maturity, offer more leverage.
Scale Advantage
- Large firms with diverse capital pools are powerful in LME negotiations as they can offer comprehensive solutions.
- They can provide both existing debt holdings and new capital, giving them leverage.