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Syndicated Loan Facilities With Lenders and Agents Facing Default

Minimizing Risks for Co-Lenders and Borrowers Through Credit Agreements and Post-Default Remedies

Recording of a 90-minute CLE webinar/teleconference with Q&A

Conducted on Tuesday, April 6, 2010
Recorded event now available

This CLE webinar provide guidance to counsel for borrowers and co-lenders to respond to defaulting lenders or administrative agents. The panel will review remedies against a defaulting lender, drafting agreements to minimize risks, and the impact of bankruptcy and FDIC receivership on borrowers and co-lenders.

Description

As banks and other lenders face financial instability, lender defaults in syndicated credit facilities continue to be a concern. While the risks of defaulting lenders primarily affect the remaining members of the syndicate, the borrower must also address certain issues at the time the loan is made.

Events of the last few years demand heightened attention to defaulting lender provisions of credit agreements. In the current market environment, minimizing the risks of a defaulting lender is critical in drafting credit agreements.

If a lender ends up in bankruptcy or FDIC receivership, special rules apply and co-lender and borrower’s remedies are more limited. The Lehman bankruptcy provided insights into how the bankruptcy courts will handle the bankruptcy of an administrative agent.

Listen as our authoritative panel of attorneys addresses the risks associated with defaulting lenders and agents in syndicated credit facilities, discusses remedies against the defaulting lender, offers best practices for drafting credit agreements, and reviews the impact of bankruptcy or receivership.

Outline

Borrower’s risks and remedies
1. Voting rights
2. Commitment fees
3. Replacement of lender
4. Termination of lender
5. Breach of contract
Lender and administrative agent risks and remedies
1. Definition of defaulting lender
2. Definition of impaired lender
3. Letters of credit and swingline loans
4. Payment priority
5. Other lenders funding the defaulted piece
6. Non-ratable reduction of commitments
7. Defaulting administrative agents
Bankruptcy and Receivership
1. FDIC rules
2. Bankruptcy rules — relief from automatic stay
3. Lehman as syndicated agent in bankruptcy

Benefits

The panel will review these and other key questions:

How can the definitions of "defaulting lender" and "impacted lender" affect the remedies of borrowers and co-lenders against defaulting lenders?
What particular risks do swing line and issuing lenders face?
What provisions should be added to existing credit agreements to provide maximum protection and flexibility to borrowers and co-lenders?
How does the automatic stay of bankruptcy or FDIC rules affect the rights of borrowers or co-lenders to amend the credit agreement?
How did the bankruptcy court handle the credit facilities where Lehman was administrative agent?

Faculty

Susan C. Alker, Partner
Reed Smith, Los Angeles

She has extensive experience representing major banks, financial institutions, private equity funds and hedge funds in corporate lending transactions. She advises clients in connection with syndicated credit facilities, leveraged acquisition financings, cross border loans, asset-based loans, investment grade credit facilities, debtor-in-possession credit facilities, and real estate financings.

Catherine Ozdogan, Partner
Bracewell Guiliani, Houston

Her practice focuses on commercial lending and financial transactions. She has extensive experience representing commercial banks and finance companies, mezzanine funds, and borrowers in a wide variety of lending transactions, including the structuring, negotiating and documenting of senior, subordinated, secured, second lien, and unsecured syndicated financial and other lending transactions.

Colleen H. McDonald, Partner
Reed Smith, San Francisco

She specializes in securitization, structured finance, commercial finance transactions and complex financial products. She advises clients on commercial and regulatory aspects of securitization transactions, including corporate and securities laws, uniform commercial code, investment company act, bank regulatory issues, creditor’s rights, and bankruptcy.

Ordering

Online CLE

Includes audio streaming of full program plus handouts (available 24 hours after live seminar).

CLE: Pre-approved for participatory or non-traditional/alternate format credit in: CA, HI*, NY*, WV*. Pre-approved for self-study credit in: AK, AZ, GA, MO, MT, TX, VT, WA.
Upon request, also available in: CO, CT*, FL, ID, KY, LA, ME, NC, ND, NE, NH, NM, NV, OR*, SC, TN, UT, WI*, WY. If you are applying for credit in one of these states, make sure to select those states when placing your order.
(*Indicates that Strafford must report attendance.)

Online CLE Audio $148.50
Available 24 hours after the live event