Debt Restructuring

Course overview Creditors and borrowers are facing an unprecedented and unpredictable market with many of the debt arrangements put in place during the last three to five years coming under severe pressure. With the trend for increased leverage of corporations over the past few years driven by high levels of liquidity now resulting in many borrowers struggling to maintain their current debt levels, lenders and investors are having to look at their investment portfolios and loan books to assess the potential risks that holding such investments present. There are a wide number of options available to manage distressed debt situations. These options range along a sliding scale of severity, from waivers for "technical" defaults to full scale liquidation and enforcement actions in situations where there is no hope of alternative action rescuing a financing arrangement. It is essential that both creditors and borrowers understand the nature of the risks presented by the current market conditions. Proactive management of the issues arising from defaulting debt arrangements will assist creditors and borrowers in managing distressed situations in a way that should minimise destruction of value. By attending this course, you will: Examine current issues in the market Learn the key documentary privisions in loan arrangements and bonds Explore inter-creditor deeds, the options for creditors and the creditor process Appreciate the tactical use of litigation Understand UK insolvency issues Identify enforcement of security options Understand the French "safeguard" process Evaluate issues in emerging markets Who should attend: In-house lawyers in financial institutions, hedge funds, private equity houses, asset managers and investment vehicles Corporate counsel Bankers concerned with negotiation of restructuring debt Lawyers in private practices who advise clients on restructuring debt
Day 1 Current issues in the international debt and loan markets The restructuring process – stakeholders and timing Key documentary provisions (loan arrangements) Triggers for default: Types of default Grace periods Consequences of default Voting arrangements and thresholds Waivers and amendments Key documentary provisions (loan arrangements) Triggers for default: Types of default Grace periods Consequences of default Voting arrangements and thresholds Waivers and amendments Noteholder meetings Tender/exchange offers Inter-creditor deeds Ranking Creditor rights and restrictions Day 2 Options for creditors Waivers Rescheduling Restructuring Enforcement Liquidation Standstill arrangements and documentation The creditor process Creditor committees Appointment Operation Managing the public/private information divide UK insolvency issues (part 1) COMI Schemes of arrangement Administration In court Out of court Liquidation UK insolvency issues (part 2) Pre-packs Enforcement options Role of the agent and the trustee Enforcement of security Day 3 Debt to equity swaps Issues Process Documentation Litigation and restructuring Tactical use of litigation Defensive litigation Exploiting opportunities in different jurisdictions The French “safeguard” process Why is it important? Insolvency arbitrage Process Creditors’ rights and representation Consequences Restructuring issues in emerging markets Legal risk Untested insolvency regimes FX risk Political risk Workshop: Identifying and solving problems in complicated aircraft finance transactions.