Leveraged Loan LME Blockers for Lenders: Closing the Uptier and Drop-Down Routes Sponsors Still Use

Maribeth A. Lemen, J.D., Director & Senior Covenant Analyst | Covenant Review

Maribeth Lemen helps credit market participants see what leveraged loan and high yield bond documents actually permit, and where the protections investors rely on can give way. As a Director and Senior Covenant Analyst at Covenant Review, she dissects credit agreements and indentures to pinpoint covenant weaknesses, documentation flexibility, and liability management risk before they turn into losses.

• Education & Credentials

A graduate of Brooklyn Law School, where she earned her J.D. cum laude and published in the Brooklyn Law Review, and of Marshall University, where she graduated magna cum laude, Maribeth is admitted to practice in New York. Early in her career she interned for the Hon. Richard M. Berman of the U.S. District Court for the Southern District of New York and the Hon. Vito M. DeStefano of the Commercial Division of the New York State Supreme Court.

• Recognition & Leadership

Her recent research has examined LMT risk and documentation flexibility among stressed leveraged loan issuers. In 2026 she authored Covenant Review’s Market Alert on LMT risk in the building products sector, scoring the credit documents of fourteen issuers whose term loans were trading at or below 90 cents on the dollar across four risk lenses, from general LMT risk to investor-on-investor and sponsor-led maneuvers, and co-authored the firm’s Market Alert on the software sector, which sorted twenty-six down-trading software credits into risk tiers. Both reports make the same case: when borrowers come under refinancing stress, weak or permissive documentation, not fundamentals alone, often determines who wins and who loses, and it is a leading indicator of where the next uptier, drop-down, or coercive exchange will surface.

• Professional Involvement

Maribeth is equally committed to teaching the discipline. She is one of the hosts of the U.S. series of Covenant Review’s Covenant Fundamentals Basic Knowledge Series, a self-paced program that uses realworld documents to walk both newcomers and seasoned professionals through the covenant system and restricted group, credit support and ranking, debt and liens, restricted payments, asset sales, financial metrics and covenant calculations, change of control, amendments and waivers, call protection and debt buybacks, and liability management transactions.

• Experience

A leveraged finance specialist, Maribeth has built extensive experience in the leveraged finance and high yield markets in both advisory and research roles, which gives her an unusually complete view of how debt documents are negotiated, drafted, and later exploited. In private practice, she represented senior lenders and borrowers in secured and asset-based financings, leveraged and syndicated loans, and structured financings as a finance associate at Ballard Spahr, advised private equity and venture capital firms on acquisitions from both the equity and debt sides, and practiced as a corporate associate at Morrison Cohen. On the research side, she spent three years at Octus (formerly Reorg), where she specialized in distressed debt, analyzing indentures and credit agreements, writing debt document summaries, and providing financial analysis for subscribers.

SESSION 1 – Where LME Value Leaked in 2025–2026: Blocker Prevalence Data and the Routes Actually Used | Maribeth A. Lemen | 12:00pm – 1:00pm

This session teaches leveraged finance lender, arranger and agent counsel how covenant scorers deem J.Crew, Serta and Chewy blockers strong or weak. It also maps the 2025–2026 routes to the clauses that would have caught them, including Better Health and Oregon Tool’s extension carve-out, the Wesco votebuilding sequence and stacked-capacity drop-downs. Named blockers now appear in most broadly syndicated loans, but the presence count says little about coverage. To show why, the hour uses the strong-versus-weak tests covenant scorers apply and the routes sponsors actually used after December 2024: extend-and-exchange, vote-building debt issuance, and drop-downs through stacked investment capacity. The key topics are the prevalence baseline, analyzing a blocker as strong or weak, extend-andexchange through the extension carve-out, building the vote (debt issuance, then lien release), dropdowns through stacked investment capacity, variations on each blocker and the private-credit data gap. Attendees leave with a route-to-clause checklist and a list of data requests for their covenant subscription. With these, they can read a sponsor-precedent blocker in a live markup, find the open route in under ten minutes, and propose a fix the arranger can sell.

BREAK | 1:00pm – 1:10pm

SESSION 2 – Marking Up a Sponsor-Form Blocker Package for Syndicated and Direct Lenders | Maribeth A. Lemen | 1:10pm – 2:10pm

This one-hour session walks through the structure of the 4 main types of LMEs and accounts for the provisions that have historically permitted them. It covers the common provisions that make these transactions possible and what to look out for in negotiations. The guided markup takes a sponsorprecedent covenant package through the routes sponsors have actually used for the main types of LMEs. The key topics are pro rata sharing carve-outs (purchase, Dutch auction and extension offers), lien subordination versus payment subordination, J.Crew, Pluralsight, Envision and Chewy blockers, omniblockers and LME structure primer. Attendees leave able to read a blocker someone else drafted, know where to look in the credit agreement for other issues that amplify the risk, find the route the blocker leaves open, and propose a fix the arranger can sell to the sponsor.