Structuring Agreements Among Lenders in Unitranche Loan Facilities and Overcoming Bankruptcy-Related Risks

Negotiating Tranching, Payment Waterfalls, Interest and Fees, Voting, Buyouts, Remedial Standstill, and Assignment Provisions

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


Conducted on Thursday, December 15, 2016
Recorded event now available


This CLE webinar will discuss structuring and negotiating key terms of the agreement among lenders (AAL) in a unitranche facility, focusing on tranching, payment waterfalls, interest and fees skims, voting, buyouts, remedial standstill, and assignments. The program will also discuss latest developments in enforceability of AALs in bankruptcy and other bankruptcy-related risks.

Description

The unitranche loan facility is provided under a single credit agreement, has a single set of security documents, and is typically administered by a single agent for the lenders. The document binding the lenders in a unitranche loan facility is the AAL. The unique structure of the unitranche facility and the AAL raises issues that lender’s counsel must understand when negotiating the terms and provisions of the AAL.

Open questions regarding the enforcement of AALs in bankruptcy include plan classification and voting, adequate protection, and the lender’s entitlement to post-petition interest. Lender’s counsel must understand the structures in the market today and the AAL issues associated with these transactions.

Listen as our authoritative panel of finance counsel guides you through the current market terms of the AAL in a unitranche facility, including tranching, payment waterfalls, interest and fees skims, voting, buyouts, remedial standstill, and assignments. The panel will also look at latest developments in enforceability of AALs in bankruptcy and other bankruptcy-related risks.

Outline

  1. Structuring key provisions of AALs
    1. Tranching
    2. Payment waterfalls
    3. Interest and fees skims
    4. Voting
    5. Buyouts
    6. Remedial standstill
    7. Assignments
  2. Enforceability of AALs in bankruptcy and bankruptcy-related risks
    1. Recent case law developments
    2. Subordination
    3. Post-petition interest
    4. Credit bid provisions
    5. Plan classification

Benefits

The panel will review these and other key issues:

  • Market terms and trends for AALs
  • Rights of last-out lenders to take direct enforcement action in the event of loan default
  • Latest case law developments in enforceability of AALs in bankruptcy

Faculty

Danielle V. Garcia, Partner
Blank Rome, Los Angeles

Ms. Garcia focuses her practice on representing lenders in secured finance transactions, including senior, second lien and mezzanine financings, on an asset-based, cash-flow and leverage basis. Such representations include the establishment of credit facilities in the context of acquisitions, recapitalizations, refinancings, debtor-in-possession financing, working capital and other strategic financings, as well as related restructurings, workouts and intercreditor negotiations. Her transactional experience includes U.S. and cross-border financing transactions involving both public and private companies operating across all market segments.

Kenneth E. Noble, Partner
Holland & Knight, New York and Boston

Mr. Noble is an attorney who focuses his bankruptcy, restructuring and creditors' rights practice on representing foreign and domestic banks, financial institutions, funds and other creditor groups in connection with middle-market and large cap out-of-court workouts and bankruptcy proceedings. His restructuring practice is industry agnostic, often concentrating in specific sectors based on macro- and micro-economic trends.


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