Loan Documentation School

Euromoney Learning Solutions

How long?

  • 0 — 5 days
  • online, in person

Euromoney Learning Solutions

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About the course

Get up to speed with loan transactions and legal requirements

The Loan Documentation School (Modular) is made up of two separately bookable modules: :

  • Module 1: Loan Documentation (Day 1-2)
  • Module 2: Advanced Loan Documentation (Day 3-5)

'Loan Documentation' is an intensive course that covers all aspects of a loan transaction, concentrating particularly on the agreement itself and on the legal implications of a properly drafted and incorrectly drafted document. Delegates will be taken step-by-step through the process of documenting a loan, from the early stages of pre-contractual issues, letters of commitment and written offers, through to administrative provisions, representations, covenants, defaults, transfer provisions, guarantees and the eventuality of insolvency.

'Advanced Loan Documentation' builds on the content of the first module - 'Loan Documentation' and it focuses on the practical interactive workshops on the key issues and on detailed comments on the agreement. The course is highly interactive, giving participants a more detailed understanding of the loan documentation in practice. It builds on the previous module by looking at the loan agreement in different commercial contexts and at structural issues which commonly arise.

Summary of course content

  • Start from pre-contractual issues and explore the key clauses in a loan agreement
  • Spot key issues and deal with comments
  • Avoid conflicts between representations, conditions precedent, undertakings and
  • events of default
  • Review the loan agreement in different commercial situations: Project corporate
  • and asset based financings
  • Review contractual support arrangements
  • Examine common intercreditor arrangements

Methodology

This course is both practical and interactive. It has been designed to be immediately relevant to lawyers and bankers involved in loan documentation. Through a series of formal lectures, group discussions and workshops, delegates will cover all aspects of loan transactions, concentrating particularly on the agreement itself.

Agenda

Module 1 - Loan Documentation

Day 1

INTRODUCTION: The most common structures of loan transactions

  • Single banks and syndicated loan
  • Term loans and revolving credit facilities
  • Single currency and multi-currency facilities
  • Loan and guarantee facilities
  • Secured and unsecured facilities

Pre Contractual Issues

TERM SHEET:

  • What issues should it address
  • How much detail should it contain
  • Is it intended to create a legally binding commitment

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

Withholding tax

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 some 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

REPRESENTATIONS

Delegates will consider the purpose of the representations. Typical representations will be considered, including common comments from either side.

Homework briefing

As homework, participants will review a specimen loan agreement t identify conflicts between different provisions

Day 2

Repeated representations

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 EVENT

Typical covenants and events of default will be discussed, including

  • Purpose
  • Financial covenants
  • Cross default
  • Material Adverse Change
  • “Default”

COVENANTS AND EVENTS OF DEFAULT (contd.)

GLOSSARY OF TERMS

BOILERPLATE PROVISIONS AND LOAN TRANSFERS**

  • Set-off clause
  • Indemnities
  • Agency clause
  • Pro rata sharing clause
  • Loan transfers
  • Novations
  • Assignments
  • Sub participations
  • Derivatives

Homework Exercise - Calculate the likely recoveries of different classes of creditors in a winding up

Day 3

SECURITY

Review Homework

SECURITY AND QUASI SECURITY**

Different types of security will be considered, including

  • liens
  • pledges
  • charges (fixed and floating);
  • mortgages
  • title as an alternative
  • security on contracts

SECURITY AND QUASI SECURITY (contd.)

GUARANTEES

  • Commercial benefit and transactions at an undervalue
  • Common provisions of a guarantee

DUE DILIGENCE AND WHERE TO DO IT

  • What issues are relevant?
  • Where to conduct due diligence
  • Legal opinions

End of Course

Module 2 - Advanced Loan Documentation

Day 4

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 borrowers rating
  • “material”, “reasonable” worth the debate?
  • Grace periods
  • Prepayment events
  • Subjectivity and control in the context of events of default

### Day 5

Workshop

  • Participants will consider a number of borrower’s comments on the Loan Agreement
  • 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

Key Legal Issues

  • Governing law and jurisdiction
  • What courts have jurisdiction to deal with disputes in an international context? What law will they apply?

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 contracts

Intercreditor arrangements

We will review a number of different intercreditor agreements relevant to different circumstances

Experts

Sue Wright

Sue Wright is a solicitor with over 18 years experience in international banking transactions, including syndicated loans, subordinated debt, structured finance and tax driven transactions. She was a partner in the banking department at Norton Rose for 8 years and was responsible for training ass...

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Loan Documentation School at Euromoney Learning Solutions

From  2855 GBP$3,707

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