Structuring Financial Covenants, EBITDA, Events of Default and MAC Clauses in Loan Documents

Maximizing Borrower Protection and Lender Remedies

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


Conducted on Tuesday, November 27, 2018

Recorded event now available

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Program Materials

This CLE webinar will provide borrowers’ and lenders’ counsel with a review of the use of EBITDA, leverage ratios and other metrics in loan documentation and financial covenants. The panel will outline critical issues relating to structuring financial covenants, related definitions, and events of default provisions in commercial loans.

Description

Negotiating the definition of EBITDA and related financial covenants is a matter of intense client focus. Sophisticated clients rely on counsel to provide knowledgeable support on EBITDA and relevant covenants.

Strategically crafted loan covenants and default provisions can provide the borrower with the flexibility to operate its business and the lender with adequate protection and remedies.

Uncertainty or lack of clarity regarding drafting financial covenant and events of default provisions may result in costly disputes. Carefully structured credit agreement provisions can minimize disagreements among the parties.

Listen as our authoritative panel of finance practitioners discusses trends in the use of EBITDA in loan documentation and financial covenants, and event of default provisions in commercial loans.

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Outline

  1. Purpose of financial covenants
  2. Types of financial covenants
  3. Financial definitions—net income, EBITDA, fixed charges, other
  4. Covenant-lite transactions
  5. Financial information in credit agreements
  6. Distinctions between cash flow and asset-backed loans
  7. Mandatory prepayments—excess cash flow
  8. Defaults/events of default
  9. Equity cure rights

Benefits

The panel will review these and other key issues:

  • Why have financial covenants?
  • What are the key conceptual drivers that fuel the negotiation of financial covenants?
  • How does understanding these key concepts help negotiate the optimal outcome for clients?

Faculty

Bursky, Daniel
Daniel J. Bursky

Partner
Fried Frank Harris Shriver & Jacobson

Mr. Bursky concentrates his practice on corporate finance and securities law, representing both issuers and...  |  Read More

Nahr, J. Christian
J. Christian Nahr

Partner
Fried Frank Harris Shriver & Jacobson

Mr. Nahr represents investment banks, private equity sponsors, hedge funds and corporations in a broad array of complex...  |  Read More

Schneck, Ezra
Ezra Schneck

Partner
Fried Frank Harris Shriver & Jacobson

Mr. Schneck represents issuers and underwriters in capital markets and finance transactions, with a focus on...  |  Read More

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