Case Study: MEP Capital Secures Better Credit Terms with Allvue Systems

How MEP Capital Used Covenant Benchmarking to Win Smarter, Safer Credit Terms

MEP Capital, a New York-based private investment firm focused on media and entertainment, was negotiating a credit deal with a borrower that pushed for aggressive “market” terms, including 5.0x initial leverage, no step-downs, and limited liquidity and restricted payment controls. To avoid over-conceding on structure, MEP turned to Allvue Systems and its covenant intelligence and market benchmarking capabilities to validate what comparable deals actually looked like.

Using Allvue Systems’ anonymized benchmark data, MEP analyzed 787 loans across 193 similar media and entertainment companies with under $50 million in EBITDA. The data showed that 4.25x leverage with a step-down, a 2.0x interest coverage ratio, and a $2 million minimum liquidity requirement were more consistent with market norms; MEP used these insights to negotiate nearly full acceptance of its proposed covenant package, with only minor changes to timing and reporting frequency.

MEP Capital