Advanced Loan Documentation

IMPORTANT: This course is a follow-on to the popular M1 - Loan Documentation course. We strongly advise that delegates first attend the M1 - Loan Documentation course unless they are already very familiar with, or experienced in dealing with the loan agreement. Course overview This course is the follow on to our ever popular loan documentation training programme that has run for more than ten years. The course will deal with the more structural and commercial side of the loan agreement and will give delegates more opportunities to practice making and responding to comments on the documents. In three days the course will cover a substantial range of topics including structural issues, contractual support arrangements, key clauses in the loan agreement, the loan agreement in different commercial contexts and legal issues that arise in financing transactions. The course will consist of a series of lectures and workshops that will provide you with a practical insight into dealing with the documentation of loans. By the end of the course you will be thoroughly familiar with the most important aspects of loan documentation. How this course will help you Be guided through the essential elements of various loan transactions Appreciate how to avoid the conflict between representations, conditions precedent, undertakings and events of default Gain a thorough understanding of different forms of contractual support and their advantages and disadvantages as compared with claims in debt Discuss a variety of issues and comments on the loan agreement which are commonly raised by borrowers Improve your knowledge of other common financing documents including a contract assignment and a subordination agreement Be able to negotiate key clauses in a financing package Master the important legal issues which commonly arise in a financing transaction including trusts and fiduciary duties Who should attend This training course is beneficial to: In-house lawyers in banks Bankers concerned with the negotiation of loans Bank executives involved in the documentation of loans Lawyers in private practice who advise clients on loan agreements Corporate counsels
Day 1 09.00 Registration and welcome coffee Review of key loan agreement issues “Relevant companies” Conflict between representations, conditions precedent, undertakings and events of default The Pari Passu clause The negative pledge The cross default clause The material adverse change clause Linking the loan to the borrower’s rating “Material”, “reasonable” worth the debate? Grace periods Prepayment events Subjectivity and control in the context of events of default Workshop 1: Review clauses from a loan agreement and identify key issues for the borrower. Day 2 Workshop 2: Participants will consider a number of factual situations and determine what clauses of the loan agreement are relevant. This exercise will highlight key topics within representations, undertakings, events of default and boilerplate including: Repeated representations Negative pledge No disposals Cross default Material adverse change Transferability The loan agreement in different commercial contexts Comparison of provisions appropriate to a corporate risk, project risk and/or an asset risk Drawdown Financial ratios Undertakings Defaults Key legal issues part 1: Basic point: Types of claim and remedies Key legal issues part 2: Governing law and jurisdiction What courts have jurisdiction to deal with disputes in an international context? What law will they apply? Key legal issues part 3: Clawback/unenforceability In what circumstances might obligations be avoided or become unenforceable? Financial assistance Ultra vires Commercial benefit Preferences Transactions at an undervalue Registration Penalties Administration Interference with contacts Key legal issues part 4: Bank/ agent liabilities Other responsibilities of the banks Agents and trustees Fiduciary duties Conflicts of interest Responsibility for misrepresentations For the arranger For a bank selling a participation in the secondary market For the borrower For the lawyers Exclusion clauses How effective are they? Day 3 Workshop 3: Participants will be given a scenario and asked to spot the legal issues. Structural issues Damages and debt – what are the differences? Structural subordination Substitutes for guarantees e.g. Commitments to inject capital Comfort letters Put options, leases, offtake agreements and other contractual support Contract assignments Security on bank accounts Security, title financing and recharacterisation Workshop 4: Participants will review key terms of a contract which a bank is proposing to take as security and identify issues which need to be resolved. Intercreditor arrangements We will review a number of different intercreditor agreements relevant to different circumstances. Applicable law Conflicts of law in international transactions Comparative practice The common law approach The EEC Convention on the law applicable to contractual obligations 4.15pm course end