A combination of loosened covenants, minimal call protections and aggressive, U.S.-style “dry powder” leveraging strategies have produced the most sponsor-friendly market for European leveraged loans since the financial crisis, according to a new report from U.S.-based Covenant Review.

The growing advantages for borrowers is most keen through institutional term loan Bs, which increasingly benefited last year from fewer maintenance restrictions and cheaper pricing to overtake high yield bonds as “the leveraged finance instrument of choice” for sponsors, the report stated.

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