Structuring Financial Covenants: Purposes, Types, Definitions, and Uses in Loan Documents
Maximizing Borrower Protection and Lender Remedies
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE course will provide borrowers' and lenders' counsel with a review of the use of EBITDA, leverage ratios, and other metrics in loan documentation and uses of financial covenants. The panel will outline critical issues relating to structuring financial covenants, related definitions, and use in commercial loans.
Outline
- Purpose of financial covenants
- Types of financial covenants
- Financial definitions: net income, EBITDA, fixed charges
- Covenant-lite transactions
- Distinctions between cash flow and asset-backed loans
- Mandatory prepayments: excess cash flow
- Equity cure rights
Benefits
The panel will review these and other key issues:
- Why have financial covenants?
- What are the critical conceptual drivers that fuel the negotiation of financial covenants?
- How does understanding these key concepts help negotiate the optimal outcome for clients?
Faculty
Kristen V. Campana
Partner
Morgan, Lewis & Bockius
Ms. Campana represents a wide variety of direct and alternative lenders, particularly those involving private sources... | Read More
Ms. Campana represents a wide variety of direct and alternative lenders, particularly those involving private sources of capital, including private debt funds, hedge funds, specialty finance companies, business development companies, private equity investors, and issuers in domestic and cross-border financings across the capital structure in connection with acquisitions, leveraged buyouts, convertible debt, equity investments, letters of credit, and project financings. Ms. Campana is a frequent author and lecturer on finance issues.
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David A. Surbeck
Partner
Holland & Knight
Mr. Surbeck represents lenders (including regional, national and international banks, debt funds and other lending... | Read More
Mr. Surbeck represents lenders (including regional, national and international banks, debt funds and other lending institutions) and corporate borrowers, in various banking and commercial finance transactions, correspondent banking, municipal finance, structured and securitized finance, and restructuring and workouts. He advises clients in syndicated, club and single lender transactions, including various secured and unsecured, and specialty collateral structures. In addition, Mr. Surbeck handles various senior, split-lien and junior financing structures.
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