Covenants Cheat Sheet (US BSL): Sponsor-Backed Deal Baskets Edge Higher as Nonsponsor Terms Converge

  Legal Analysts: Ian Chin, Magnus Wieslander Legal Research: Angelo Filarmonico Data: Vesta Kaspute   Relevant Item: US Covenants BSL Cheat Sheet (PDF)   Key Takeaways   Sponsor flexibility edges higher: The median general restricted payments basket in sponsor-backed deals rose to 45% of EBITDA from 40% in the second quarter, the median synergies addback cap rose to 30% from 25% and the top end of the range for general debt and liens basket were stretched by outliers in the third quarter of 2026.   Nonsponsor terms are converging on sponsor levels: The median general debt basket in nonsponsor deals rose to 50% of EBITDA, matching sponsor deals, as the bottom of the nonsponsor incremental free and clear range rose to 50% of EBITDA from 35%.   Lenders are staying firm on nonguarantor debt incurrence: Caps were present in more than half of deals, with the top of the range falling to 100% of EBITDA, as lenders become increasingly aware of priming risk from structurally senior debt.   MFN protection remains stable as the edges moved: Six-month sunsets remain the market standard, but the top of the range stretched to 36 months in sponsor-backed deals while the median monetary carve-out[...]