Structuring Commercial Loan Documents to Protect Non-Affiliated Lenders

Negotiating and Drafting Provisions Involving Loan Buybacks, Additional Pari Passu Debt, Non-Pro Rata Prepayments, and Intercreditor Agreements

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


Conducted on Wednesday, September 18, 2013

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE webinar will provide commercial finance attorneys with a review of loan buyback provisions, explaining how they can fail to protect non-affiliated lenders and offering approaches to negotiate and draft to address non-affiliated lenders’ concerns.

Description

Borrowers and their financial sponsors have been successful in negotiating senior secured credit agreement provisions permitting borrowers and their affiliates, including equity sponsors, to purchase term loans and to incur additional pari passu secured debt, subject to certain restrictions.

Many provisions governing such purchases and incurrence of additional debt, now prevalent in leverage financing, do not adequately protect the interests of lenders who are not affiliates of the borrower. These shortcomings are particularly important when a borrower defaults or in work-out situations.

Counsel must understand provisions such as additional pari passu debt, equivalent debt facilities, permitted (partial) refinancing facilities, additional permitted secured debt, and non-pro rata prepayments, as well as intercreditor agreements and bankruptcy issues.

Listen as our authoritative panel guides you through the complex issues concerning loan buyback provisions and discusses provisions that shift control away from lenders’ rights.

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Outline

  1. Ways control has shifted away from lender
  2. Additional pari passu debt
    1. Incremental facilities
    2. Equivalent debt/sidecar facilities
    3. Permitted/partial refinancing facilities
    4. Additional permitted secured debt
  3. Non-pro rata prepayments
    1. Borrower buybacks
    2. Affiliated lender purchases (and further contribution)
    3. Affiliated debt fund purchases
    4. Purchases by junior debt holders
  4. Intercreditor agreements
  5. Bankruptcy considerations

Benefits

The panel will review these and other key questions:

  • What additional pari passu debt shifts control from lenders, and how should counsel address this in negotiations?
  • What parameters should counsel consider in negotiating affiliated lender assignments and loan buyback provisions?
  • What provisions should be included in intercreditor agreements to protect lenders or borrowers when negotiating credit agreements with loan buybacks, affiliated lender purchases, and the other provisions referred to above?

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

Faculty

Robert S. Finley
Robert S. Finley

Partner
King & Spalding

He is a member of the Finance Practice Group, focusing his practice on representing lenders and arrangers in major...  |  Read More

Ram Burshtine
Ram Burshtine

Partner
King & Spalding

He is a Partner in the firm’s Finance Practice. He has broad experience in representing lenders, investors,...  |  Read More

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Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

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