Negotiating Loan Documentation for LBOs Course

 Location: London (Central)

 Dates: 01.10.2012 - 01.10.2012  Duration: 8h00  Price: 650.00 GBP

Leveraged deals and especially buyouts have become increasingly complex over the past few years. Syndicated loans have attracted a range of new investors, (e.g. CDOs, hedge funds) who have had a dramatic impact on debt financing structures and terms as more laminated financing structures have evolved. Smaller, bilateral loans have also been affected as those lenders have been forced to offer sponsors junior debt, particularly mezzanine.

At the same time, the Loan Market Association has developed a library of standard documentation however, whilst widely used, many transactions use this as a point of departure for detailed negotiations, particularly in the larger deals, as sponsors are quick to take advantage of any chinks in Lender’s defences.

This course provides participants with practical insight into the important commercial and technical issues which affect loan documents in leveraged buyouts.

Participants will learn to identify the key issues in the Credit Agreement and the ramifications for the equity sponsor

Case Study: the course will be accompanied by a detailed case study which is based on a term sheet.


Course categories:Investment Banking / M & A Courses, Private Equity / Venture Capital, Private Equity / Venture Capital Inhouse

COVERED TOPICS

Introduction

  • Review of LBO structures
  • The Parties and key agreements in the deal
  • Key loan documents (Commitment Letter, Mandate Letter, Interim Loan Agreements)
  • Role and influence of LMA documentation
  • General approach to the Loan agreement
  • Practical tips on how to identify the key areas

Scope of the Loan

  • General structure and function of the Loan and Schedules
  • Borrowers, Obligors, Guarantors, Groups
  • Changes to the parties
  • Key definitions
  • Definition of “Group” and impact on the deal
  • Issues re Dormant and (non) Material subsidiaries

Key aspects of Utilization, RCFs & Capex Facilities

  • Conditions of Utilisation and Conditions Precedent
  • Specific issues for Revolving Facilities
  • Interest and interest periods
  • Margin and margin ratchets
  • Aspects relating to RCFs – clean-downs
  • Aspects relating to Capex facilities

Repayment, prepayment & cancellation

  • Repayment generally and repayment styles
  • Voluntary prepayment or cancellation
  • Mandatory repayments (cash sweeps)
  • Surplus cash
  • Disposals
  • Warranty claims and other sources
  • Permitted payments (to Sponsor)

Representations and Covenants

  • Representations Covenants & undertakings generally
  • Information covenants
  • General Undertakings and negative pledges
  • Financial covenants – general approach
  • Typical financial covenants – use and applications
  • Pros and cons of the various financial covenants

Security Issues

  • Overview of the LMA Agreed Security Principles
  • Core carve-outs sought by Sponsors
  • Other exceptions sought by Sponsors
  • Key negotiation issues re Guarantor Coverage Test
  • What is covered (Assets, Turnover etc?)
  • Agreed percentage
  • Which Companies are included?

Default and Events of Default

  • Default vs Event of Default
  • Typical events of default
  • Key issues re MAC clauses
  • Equity cures, Mulligans, yank the bank, snooze n lose

Inter-creditor issues re mezzanine loans

  • The key issues relevant to mezzanine lenders (Confidentiality, Information)
  • Other key issues
  • Standstills
  • Enforcement
  • Protection vs the Sponsor (Option to Purchase)
  • Release of Security in Distress (European Directories)
  • Valuation issues (IMO Carwash)

REGISTRATION & PRICING INFORMATION

Contact us if you are looking to book multiple participants as we offer discounts as follows:

  • 1-2 participants - full price
  • 3-4 participants - 15% discount
  • 5-6 participants - 20% discount
  • 7-8 participants - 25% discount
  • Over 9 participants - 30% discount

For more information or to be contacted by the event provider please fill this form:

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Price: 650.00 GBP
Location: London (Central)
Event date: 01.10.2012 - 01.10.2012
Event duration: 8h00
Event time: 09.00 h - 17.00 h

ADDITIONAL DATES

CONTACT US
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Email: info@financialveritas.com

Phone: +44 208 133 5917

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