While no particular industry is insulated from the effects of these events, clients are especially concerned about exposure in the senior living, energy, and hospitality markets. In response to these concerns, some of our lender clients have begun to proactively reach out to borrowers with measures intended to soften the inevitable blow to the revenue stream as a result of COVID-19 and the market correction.

One of the preemptive plans offer six months' interest only to commercial clients to help them weather the storm until financial performance stabilizes. This may temporarily help these borrowers, but the measure will not address the performance covenant issues that are sure to follow the revenue losses from these events. Many clients are doing a "deep dive" review of each loan or credit facility to determine the level of risk posed by the nature of the collateral as well as its geographic location. One particular provision on which banks are focused is the material adverse change default (a MAC Default). A loan document for a particular credit that includes a MAC Default gives the lender the ability to bring the borrower to the table to work together through the crisis well before the performance covenant breach materializes. This is only a small sampling of the actions now under consideration. The breadth of this crisis will require creativity and patience from borrowers and lenders as there will be no quick or simple solutions. The key is to have competent professionals seeking solutions that protect collateral and provide a path forward for borrowers.