Structuring Commercial Loan Term Sheets, Proposals and Commitment Letters: Key Terms for Lenders and Borrowers

Avoiding Unintended Consequences, Limiting Drafting Ambiguity

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


Conducted on Tuesday, June 27, 2017

Recorded event now available

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Program Materials

This CLE webinar will provide commercial finance counsel with guidance on using and analyzing term sheets, proposals and commitment letters in commercial finance transactions. The panel will explain the potential risks associated with their usage and provide best practices for minimizing those risks through careful drafting, keeping in mind market realities.

Description

Commercial loan term sheets and proposal and commitment letters can be an important tool in making sure that the parties understand and agree to the terms of a proposed financing transaction. They can set the stage for diligence and other efforts that will be needed to get to a closing, and provide comfort for lenders in covering expenses and fee payments.

But these documents can also introduce significant risk to lenders if not drafted carefully by obligating them to fund the transaction under circumstances that aren’t anticipated, and on the other hand to borrowers by not providing them certainty of financing when a planned acquisition or investment is dependent on its availability.

Listen as our experienced panel of finance practitioners examines term sheets, proposal and commitment letters, the appropriate situations of use, terms to use and terms to avoid, and potential risks from both a lender and borrower perspective.

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Outline

  1. Impact of current market conditions on loan documentation
  2. Negotiating key terms
    1. Conditions
    2. Loan amount
    3. Interest rate
    4. Prepayment penalty
    5. Financial covenants
    6. Casualty and condemnation proceeds
    7. Default provisions
    8. Affirmative and negative covenants

Benefits

The panel will review these and other key issues:

  • How do these documents differ, when should each be used and what types of risks are created by their use?
  • What are the key provisions in commitment letters—and how can the borrower and lender each minimize risk through these provisions?

Faculty

Amy L. Kyle
Amy L. Kyle

Partner
Morgan Lewis & Bockius

Ms. Kyle represents leading financial institutions in connection with a broad range of finance-related matters,...  |  Read More

Arleen A. Nand
Arleen A. Nand

Partner
DLA Piper

Ms. Nand represents commercial, cooperative, development and investment banks, as well as hedge funds, private equity...  |  Read More

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