Shearman & Sterling LLP
Issue link: https://digital.shearman.com/i/1494417
Restricted vs. Unrestricted Subsidiaries (cont.) 8 Why would the issuer designate a subsidiary as unrestricted? 01 New business 02 Type of industry: Corporate governance/regulatory limitations 03 Project finance companies (construction etc.) or asset managers Designation can happen at the time of issuance or later 01 Unrestricted Subsidiaries can be designated as such on day 1 by listing them in the definition 02 If an entity is designated after day 1, then there would need to be sufficient capacity under the restricted payments test The Debt Stack – Structuring and Incurrence Covenants