Asset-Based Lending: Navigating Borrowing Base, Article 9 Collateral Issues, and Key Loan Documentation Provisions

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


Conducted on Thursday, January 10, 2019

Recorded event now available

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Program Materials

This CLE webinar will discuss the mechanisms of asset-based financing transactions, including issues associated with the borrowing base, obtaining and perfecting a security interest in the assets as collateral under the UCC, and essential terms in asset-based lending (ABL) loan documentation.

Description

In asset-based financing transactions, the lender lends up to a percentage of the value of the borrower's assets—the borrowing base. Assets used in ABL financing typically include cash, accounts receivables, inventory, and equipment.

ABL lending frequently involves extensions of credit to borrowers representing a higher degree of credit risk than other types of commercial lending. As a result, ABL loans include features such as cash management, and a perfected security interest in all collateral is typically required.

Listen as our authoritative panel of finance attorneys discusses structuring and documentation of asset-based financing transactions, including those with senior and junior lenders. The panel will review critical issues associated with different assets in the borrowing base, obtaining and perfecting a security interest in the assets, and essential terms in ABL loan documentation.

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Outline

  1. Types of ABL facilities
  2. Borrowing base
    1. Cash
    2. Accounts receivables
    3. Inventory
    4. Equipment
    5. Real estate
  3. Obtaining and perfecting a security interest in assets under UCC Article 9
  4. Loan documentation
    1. Representations and covenants
    2. Reserves and dilution
    3. Conditions precedent
    4. Cash management (deposit control account agreements and lockboxes)
    5. Subordination/intercreditor agreements

Benefits

The panel will review these and other relevant issues:

  • Key issues with different assets in the borrowing base
  • Obtaining and perfecting a security interest in the assets under UCC Article 9
  • Cash management provisions and deposit account control agreement in ABL loan documentation
  • Subordination and intercreditor agreements in ABL loan documents

Faculty

Blaut, Ari
Ari B. Blaut

Partner
Sullivan & Cromwell

Mr. Blaut maintains a broad corporate practice advising clients on a wide range of financing transactions, including...  |  Read More

McKnight, S Neal
S. Neal McKnight

Partner
Sullivan & Cromwell

Mr. McKnight  is co-head of the Firm’s Finance and Restructuring Group and co-head of the Firm’s...  |  Read More

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