- The most common structures of loan transactions
- Single banks and syndicated loans
- Term loans and revolving credit facilities
- Single currency and multi-currency facilities
- Loan and guarantee facilities
- Secured and unsecured facilities
- What issues should it address?
- How much detail should it contain?
- Is it intended to create a binding legal commitment?
Workshop: Libor Funding and Broken Funding Costs
This session will involve consideration of how the Eurocurrency interbank markets work and the consequences in the documentation in terms of:
- Interest rates and interest periods
- Broken funding costs (and profits)
- Default interest
Here we will look at withholding tax, double taxation treaties, and the consequences for the loan documentation.
Overview and Administrative Provisions
This session will involve an overview of the loan agreement and how it is structured to protect the lender, and an examination of the "mechanical" provisions of a typical loan agreement, such as the payments clause and the procedures to be followed on drawdown.
- Drawdown procedures
- Repayment and prepayment
- Delegates will consider the purpose of the representations. Typical representations will be considered, including common comments from either side.
As homework, participants will consider whether certain activities are prohibited by the loan documentation; and if so; which provisions are relevant.
We will review the homework, the impact of repeating representations, and the interrelations between different parts of the document, both in a term loan and in a revolving credit.
Covenants and Events of Default
Typical covenants and events of default will be discussed, including:
- Financial covenants
- Cross default
- Material adverse change
Glossary of Terms
'Boilerplate' Provisions and Loan Transfers
- Set-off clause
- Agency clause
- Pro-rata sharing clause
- Loan transfers
- Sub participations
- Calculate the likely recoveries of different classes of creditors in a winding up.
Review of Homework Exercise
Security and Quasi Security
Different types of security will be considered, including:
- Charges (fixed and floating)
- Title as an alternative
We will also consider the different insolvency regimes in the UK and the circumstances in which security may be set aside (or enforcement restricted) under English law.
- The important provisions of a typical guarantee will be examined as will:
- Commercial benefit and transactions at an undervalue
- Common provisions of a guarantee
- What issues are relevant?
- Where to conduct due diligence
- Legal opinions