Loan Documents & Security

Overview

Participants will gain an understanding of the key points for consideration in loan and debenture documentation.

The course focuses, from a practical point of view, on the content and terminology of example documents and their intended consequences from the point of view of both borrower and lender.

Important danger areas are highlighted in order that they may be specifically and fully negotiated.

Course Content:

Overview

Ø       Types of loan

Ø       Committed & uncommitted facilities

Ø       Overdrafts & term loans

Ø       Revolving credit facilities

Ø       Syndicated facilities

Ø       Administrative agent & security trustee

Ø       Objectives of the parties

Ø       Term sheet

Structure of a Loan Agreement

Ø       Loan Market Association clauses

Ø       Operating, monitoring and boilerplate clauses

Ø       Conditions of utilisation & drawdown

Ø       Margin, LIBOR & mandatory cost

Ø       Interest periods & default interest

Ø       Commitment & arrangement fees and costs

Ø       Representations & warranties

Ø       Financial, non-financial and information covenants

Ø       Negotiating covenants

Ø       Material adverse change (MAC) clauses

Ø       Events of default & cross default

Ø       Acceleration clauses

Ø       Grace periods

Security

Ø       Possession & ownership

Ø       Mortgages, charges, pledges & liens

Ø       Fixed & floating charges

Ø       Permitted security

Ø       Assignment

Ø       Further assurance

Ø       Comfort letters

Ø       Guarantees & indemnities

Debentures

Ø       Taking security

Ø       Covenant to pay

Ø       Negative pledge

Ø       Book debts, IPR, plant & machinery

Ø       Crystallisation of floating charge

Ø       Enforcement

Ø       Administrators & administrative receivers

Ø       Enterprise Act 2002

Reviewing the document

Ø       Legal opinions

Ø       Lender’s principal concerns

Ø       Three stages of protection

Ø       Borrower’s principal concerns

Ø       Final check before signature