Commitment Letters in Commercial Loans

Borrower and Lender Approaches to Negotiate and Enforce Binding Loan Commitments

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


Conducted on Thursday, March 15, 2012

Recorded event now available

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Program Materials

This CLE webinar will provide guidance to counsel for lenders and borrowers on negotiating loan commitment letters. The panel will outline best practices for enforcing loan commitments and resolving disputes.

Description

Businesses seeking traditional bank loans to meet working capital needs or to acquire additional businesses often obtain a commitment letter from the lender, setting forth the terms and conditions the business must meet to obtain the loan.

In the negotiation, the lender looks at a number of factors: its relationship with the potential borrower, the borrower's creditworthiness, the purpose of the loan, the lender's own internal policies, the size of the loan, and whether the loan is syndicated, among others.

Careful and strategic negotiation of key provisions in the commitment letter by both parties can result in cost savings to the borrower and ensure adequate protections and remedies for the lender.

Listen as our authoritative panel of corporate and commercial finance attorneys offers effective approaches for borrowers' and lenders' counsel for negotiating a loan commitment letter. The panel will provide strategies for enforcing loan commitments and resolving disputes.

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Outline

  1. Legal developments
    1. Recent case law trends
    2. Impact of current market conditions on loan documentation
  2. Negotiating key terms
    1. Loan amount
    2. Collateral
    3. Interest rate
    4. Prepayment penalty
    5. Guaranties
    6. Financial covenants
    7. Casualty and condemnation proceeds
    8. Default provisions
    9. Affirmative and negative covenants
  3. Enforcing commitments and resolving disputes

Benefits

The panel will review these and other key questions:

  • How are current market conditions affecting businesses' ability to obtain traditional bank financing?
  • What are the key provisions in commitment letters—and how can the borrower and lender each minimize risk through these provisions?
  • What lessons can be learned from Amcan Holdings Inc. and other recent case law developments on how to ensure that a commitment letter is binding upon the parties?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Aric T. Stienessen
Aric T. Stienessen

Partner
Hinshaw & Culbertson

He represents lenders, investment banks and borrowers in commercial finance transactions. He also represents businesses...  |  Read More

Goodison, Eric
Eric Goodison

Partner
Paul Weiss Rifkind Wharton & Garrison

He has over 20 years of experience as a financing lawyer. He represents domestic and international clients in their...  |  Read More

Pauline M. Stevens
Pauline M. Stevens

Partner
Allen Matkins

She represents banks and other financial institutions as well as borrowers in connection with financial transactions...  |  Read More

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