Module 1 - Loan Documentation

Day 1

• 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

TERM SHEET:

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

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

• Drawdown procedures
• Repayment and prepayment

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

Day 2

 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

 Typical covenants and events of default will be discussed, including

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

• 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 

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

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

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

Module 2 - Advanced Loan Documentation

Day 4

• 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

Day 5

• 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

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

• In what circumstances might obligations be avoided or become unenforceable?
• Financial assistance
• Ultra vires
• Commercial benefit
• Preferences
• Transactions at an undervalue
• Registration
• Penalties
• Administration

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