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By: Binoy Dharia, Justin Wagstaff, White & Case

Portability isn't a typical feature of loan documents, but in a market where refinancing remains expensive and at times tricky, stakeholders are exploring how portability terms can help maintain M&A activity.

Given that the debt and M&A markets can be challenging or a resetting of debt terms in the context of a refinancing can be expensive, investors, dealmakers and borrowers are looking to either take advantage of or build into the document debt portability to help get deals over the line or facilitate an M&A transaction. Portability allows companies to carry over or "port" existing debt facilities when company ownership changes. Without a portability feature, loan agreements typically force a company to repay existing debt when being sold to a new owner by including a "change of control" event of default.

Although portability has not been a common feature of loan documentation, during the past 12 months, private equity sponsors have increasingly looked to take advantage of portable debt facilities to support M&A transaction flow.

For example, recent high-profile deals that have featured portable financing packages include Veritas Capital's US$5.3 billion sale of consulting firm Guidehouse to Bain Capital Private Equity and Blackstone's acquisition of software company Civica from Partners Group for almost 2 billion. Meanwhile, Aquiline Capital Partners secured portability terms when refinancing......................

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