GRACE During March and April there was a lot of concern internally about what would happen. No-one knew how long this would go for. All the banks became internally focused on looking at existing portfolio names and trying to work their way through their own back books. This process was to determine which companies would be exposed and to what extent.

At the same time, we were getting a lot of amendment and waiver requests, as well as requests for liquidity lines. Everyone was trying to right their own ships during this time of uncertainty.

The bank was nervous about what the impact on funding would be. We had seen what happened during the financial crisis when there was difficulty in funding markets. There was also concern around portfolio names and what would happen to them.

Amendment and waiver requests continued right up to 30 June as companies sought covenant relief before their full-year reporting. A lot of these, particularly at the start, were short-dated as there was a view that it might only be a six-month blip.

Generally, domestic and international banks have been supportive of most corporate borrowers with covenant waiver requests. Time periods for getting things done extended a bit as lenders had to go through credit departments which were receiving a lot of requests. The bigger and smaller offshore banks came back with consents quickly and there were very few hold-ups for getting covenant waiver relief through.

We are beginning to see a second wave of covenant relief now as it becomes evident that the impact of the pandemic will be longer-lasting than initially thought, particularly due to the second Victorian lockdown.

Requests for liquidity lines have dried up significantly. Initially, everyone was just getting all the liquidity they could and putting it away for a rainy day. A lot of these have been repaid by borrowers that have got through the worst of it.

LEWIS We try to work with borrowers where we can. Fortunately, we have not been inundated with covenant relief requests in the infrastructure debt space. Hopefully this means we have picked the right assets at the beginning – those with enough access to liquidity and good management – rather than just being lucky.

We take a pragmatic approach when consent requests do come. To the extent we can offer flexibility, we will do so to ensure the viability of the borrower.

DAVID We want to understand the basis for a request. It is good when an issuer holds a call rather than sending us terms written by lawyers, because sometimes we do not understand what is actually behind the request.

We will always approach these from the perspective of what is best for the client. Sometimes it can be difficult if there is a request for us to give something up, like a waiver covenant or to waive reporting requirements. If we are not receiving anything in return it is hard for us to argue to a client that this is in their best interest.

We are happy to use our relationship, spend our time and talk through how we are viewing things, but it is hard for us to use client capital if it is not going to get them something that is at least neutral.

VAN DER GEEST It was clear that airports were the first into this crisis and likely to be the last out. For those that required a consent process, a key piece was engaging with the investor community and first and foremost putting yourself in their shoes.

It is important to be transparent, know what you are asking for and have active dialogue along the way. For us, the bank process took three weeks. In the US private placement [USPP] market it took 4-5 weeks. Investors were barraged with consents given the USPP market is based on having covenants.

Given the impact of the crisis on the airport sector, we went for 12-month covenant relief. It was a very orderly process and everyone was very pragmatic. Equally, we needed to provide the right information to investors.

The biggest lesson out of this on the issuer and investor side is that it is best to have a blend of your investor base in there to work with you. We had a good breadth of investors across our requirements. I will be looking at order books differently coming out of this – in a good way.