Morning Scan: Banks Anti-Activist Loan Provisions Challenged; Staff ...

Wall Street Journal

Activist investors have brought about another change to how banks to business. Banks have increasingly pushed for provisions in loan agreements to require corporate borrowers to repay a loan in full if a majority of directors are ousted by activists. Banks are ultimately worried that if an activist seizes control of a board, it might force the company to pursue debt-fueled stock buybacks, which would erode the company's credit rating. However, lawsuits are...