Loan Documentation School
'Loan Documentation' is a three day intensive course which covers the documentary aspects of a loan transaction, concentrating particularly on the loan agreement itself. The course will provide a clause-by-clause analysis of the loan agreement, highlighting the commercial issues which they give rise to. You will be taken step-by-step through the documentation, from the early stages of offer letters, through to administrative provisions, representations, undertakings, defaults, transfer provisions, guarantees and security By attending this course, you will fully understand the commercial implications of the loan documentation and the key issues to watch out for
Upcoming start dates
23 October, 2023
- Hong Kong
- The most common structures of loan transactions
- Single banks and syndicated loans
- Term loans and revolving credit facilities
- Single currency and multi-currency facilities
- Loan and guarantee facilities
- Secured and unsecured facilities
- What issues should it address?
- How much detail should it contain?
- Is it intended to create a binding legal commitment?
Risk free rates and LIBOR transition
This session will involve consideration of risk free rates and the transition from LIBOR
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 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
- Participants will consider the purpose of the representations. Typical representations will be considered, including common comments from either side.
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.
Undertakings and Events of Default
Typical undertakings and events of default will be discussed, including:
- Financial covenants
- Pari passu
- Negative pledge
- Cross default
- Material adverse change
Glossary of Terms
Participants discuss the meanings of common terms used in this field
'Boilerplate' Provisions and Loan Transfers
- Set-off clause
- Agency clause
- Pro-rata sharing clause
- Loan transfers
- Sub participations
- Credit Derivatives
Calculate the likely recoveries of different classes of creditors in a winding up
Key features of a security document
Workshop – application of funds clauses
Impact of security on the documentation and on the transaction process
Different types of security will be considered, including:
- Charges (fixed and floating)
- Title as an alternative
- The important provisions of a typical guarantee will be examined as will:
- Commercial benefit and transactions at an undervalue
- Common provisions of a guarantee
- Similar instruments such as indemnities, standby letters of credit and advance payment bonds
Review of Key Loan Agreement Issues
- “Relevant Companies”
- Default, Events of Default and remediable Events of Default
- 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
- “material”, “reasonable” worth the debate?
- Grace periods
- Prepayment events
- Subjectivity and control in the context of events of default
- Comparison of asset finance, corporate finance and project finance based loan agreements
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
Key Legal Issues
- 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
- Transactions at an undervalue
- Interference with contracts
- The role of the legal opinion
- Subordinated debt and subordinated security
- Different methods of subordination of debt
- The issues to be addressed by an intercreditor agreement
- London - £ 5295 + VAT
- Paris - £ 5295 + VAT
- Hong Kong (in China) - £ 6095 + VAT
Certification / Credits
- Recognise the legal nature of a letter of commitment
- Understand the structure of the documentation and how the various provisions interlink
- Learn how to spot the key commercial issues quickly
- Become familiar with the interest rate, increased costs and withholding tax provisions and the regulatory issues which help to shape them
- Appreciate the significant issues in the representations, repeating representations, undertakings and events of default from both a lender’s and borrower’s perspective
- Become familiar with the structure of security documentation and the importance of the application of funds clauses
- Learn what legal opinions do and do not do and their role in the due diligence process
Why choose Euromoney Learning?
4.6/5 rating on course check for service
60,000 professionals trained across public courses
80+ countries where training is delivered
Average rating 4
The organisation of the course was perfect. Small group with high learning potential and enough time for questions.
It was very informative, presenter was very knowledgeable and offered valuable information and tips.
The Euromoney Learning team was reactive and the training was useful.
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