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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 premium CLE webinar with Q&A

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Conducted on Tuesday, October 2, 2018

Recorded event now available

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This CLE course will provide commercial lending counsel with a review of essential provisions in a split-collateral intercreditor agreement, including the priority of rights, access to collateral, payment blockage and standstill provisions. The panel will address the negotiation of provisions from the perspective of the asset-based lender (ABL) and term lender.

Description

Middle-market leveraged finance arrangements often contain multiple tranches of debt. Negotiating related intercreditor agreements has become more dynamic, and second lien lenders and junior lenders are increasingly able to obtain more favorable terms.

ABLs and term lenders often join to provide such multi-tranche financing through a split collateral lien structure. In that 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 gets a junior lien on the other lender’s pool of collateral.

Listen as our authoritative panel of commercial finance practitioners analyzes critical provisions in a split collateral intercreditor agreement from the perspectives of both the ABL and the term lender. The panel will discuss essential provisions, including among others, the priority of rights, access to collateral, payment blockage and standstill provisions.

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Outline

  1. Defining collateral pools
  2. Priority of rights issues
  3. Access to collateral
  4. Payment blockage
  5. Standstill and the senior lienholder’s right to exercise remedies
  6. Waterfall provisions

Benefits

The panel will review these and other high priority issues:

  • Defining and delineating the collateral pools of the lenders
  • Understanding priority rights to proceeds from collateral or other receipts not allocated to either lender
  • Identifying and negotiating each lender’s rights and remedies following a borrower default

Faculty

Hildebrandt, Jennifer
Jennifer B. Hildebrandt
Partner, Corporate Department
Paul Hastings

Ms. Hildebrandt represents banks, commercial finance companies, hedge funds, and other lenders in commercial and...  |  Read More

Ross, Christopher
Christopher G. Ross
Partner, Corporate Department
Paul Hastings

Mr. Ross' practice focuses on representing U.S. and foreign financial institutions and corporations in leveraged...  |  Read More

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