Structuring Intercreditor Agreements in Split Collateral Lien Structures Between ABL and Term Lenders

Navigating Collateral Pool, Priority of Rights, Access to Collateral, Standstill Period, and Waterfall Provisions

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


Conducted on Thursday, April 6, 2017

Recorded event now available

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Program Materials

This CLE webinar will provide commercial lending counsel with a review of key provisions in a split-collateral intercreditor arrangement, including, among other things, priority of rights, access to collateral and standstill provisions. The panel will address the negotiation of provisions from the perspective of the asset-based lender (ABL) and term lender.

Description

In the current market, financing arrangements often contain multiple tranches of debt which are accompanied by complex intercreditor arrangements, and split collateral arrangements are more popular. With increasingly common complex split collateral intercreditor arrangements, and increasingly common built-in flexibility in loan documents to accommodate additional debt and liens in a variety of structures on a post-closing basis, lenders must have a firm grasp of the considerations involved in split collateral intercreditor arrangements.

In a split collateral structure, the ABL lender receives a first lien on the working capital assets—typically receivables, inventory and related proceeds—and the term lender receives a first lien on the remaining assets. Each lender also often receives a junior lien on the other lender’s pool of collateral.

Listen as our authoritative panel of commercial finance practitioners analyzes key provisions in a split collateral intercreditor arrangement from the perspectives of both the ABL and the term lender. The panel will discuss key provisions, including, among other things, priority of rights, access to collateral and standstill provisions.

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Outline

  1. Defining collateral pools
  2. Priority of rights issues
  3. Access to collateral, including license rights relative to intellectual property
  4. Standstill and the lienholders’ right to exercise remedies
  5. Waterfall provisions

Benefits

The panel will review these and other key issues:

  • Collateral pools of the lenders
  • Priority rights to proceeds from collateral or other receipts not allocated to either lender
  • Access rights and license rights
  • Standstill provisions
  • Each lender’s rights and remedies following a borrower default

Faculty

Bell, Katherine
Katherine E. Bell

Partner
Paul Hastings

Ms. Bell's practice focuses on commercial and corporate finance transactions. She regularly represents...  |  Read More

Burke, Peter
Peter S. Burke

Partner
Paul Hastings

Mr. Burke works in the firm's Finance and Restructuring Group and his practice focuses on commercial and...  |  Read More

Yount, Jennifer
Jennifer St. John Yount

Partner, Chair of Finance and Restructuring
Paul Hastings

Ms. Yount’s practice consists of representing banks, finance companies, and other lenders in working capital...  |  Read More

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