Structuring Anti-Net Short Provisions in Syndicated Credit Facilities
Determining When a Net Short Position Exists: Divestment, Voting, and Other Limitations
Recording of a 90-minute premium CLE webinar with Q&A
This CLE course will examine the issues presented by these complex and rapidly evolving terms, and the other so-called "Windstream provisions" that attempt to shield borrowers from net short debt activist investors.
- How a net short position arises
- Introduction to credit default swaps: a bet against the borrower
- Net short determination: benefit of CDS gain exceeds loan loss
- Net short provisions
- Lender disqualification provisions
- Limitations on voting rights and access to information
- Forced divestment or prepayment
- Accounting for lender affiliates: unrestricted lenders
The panel will review these and other essential issues:
- Typical structure of a credit default swap, and at what point an investor’s CDS position tips the scales into a net short position on a particular loan or borrower?
- Scope of provisions available for credit agreements to address the “threat” of net short lenders? Is forced divestment necessary, or just reduced voting rights?
- Should positions held by a lender’s affiliates count in the net short calculation? What factors should be taken into account when evaluating the affiliates question?
Allen & Overy
Mr. Koretzky advises financial institutions across a variety of domestic and international finance transactions. He... | Read More
Mr. Koretzky advises financial institutions across a variety of domestic and international finance transactions. He regularly counsels foreign and domestic banks, investment funds, and other financial institutions, as well as borrowers and issuers, on first- and second-lien secured and unsecured loans, leveraged and acquisition financings, asset-based loan facilities, debtor-in-possession financings, restructurings and recapitalizations, and general corporate finance matters.Close
Darren A. Littlejohn
Fried Frank Harris Shriver & Jacobson
Mr. Littlejohn is a corporate partner, resident in the New York office, and a member of the Firm's Derivatives and... | Read More
Mr. Littlejohn is a corporate partner, resident in the New York office, and a member of the Firm's Derivatives and Asset Management Practices.Close
Mr. Williams is a partner in the New York office of Milbank and a member of the firm’s Alternative Investments... | Read More
Mr. Williams is a partner in the New York office of Milbank and a member of the firm’s Alternative Investments Practice.Close