Advanced Loan Documentation

The course intends to provide participants with a solid understanding of the more commercially focused and structuring issues and the impact of the documentation process. Where possible, links will be created with risk management tools an systems including ERP’s.

Key clauses will be reviewed, default arrangement, financial risk identification & measurement will be analyzed and documented. Each session will contain a number of examples and/ or case-studies to master the techniques discussed and sophisticate their understanding and practicalities.

Close interface between the legal an the commercial/financial realities will be used as the backbone to look at the issues surrounding negotiating terms of arrangements and the game theory impact when dealing with Long-Term relations.

Towards the end, special situations will be examined including real estate financing, financing alternative investments and PPP/PFI/PIPE driven projects.

Course content:

Day 1

Introduction
 The most common loan transactions
 Pre-contractual issues & documentation requirements
 Relationship to risk management facilities
 Is it all about the details
 Interbanking market operations with focus on interest rates, funding costs, periods, etc..
 Tax aspects involved (national law, withholding taxes and double taxation agreements)

Loan agreements & documentation
 How is the lender protected?
 Structuring the contractual arrangement
 Specifics: drawdown’s & repayments
 Covenants & default situations
• Material adverse change
• Cross default
• Novations
• Derivatives
• Indemnities
• Set-off clause

Securities & guarantees & due diligence
 Titles
 Liens
 Pledges
 Charges
 Warrants
 Mortgages
 Guarantees & valuation
 Clawback
 Getting the due diligence right

Day 2

Banking term sheets
 What should it include?
 A legally binding arrangement?
 Type of info included

Specific clauses
 Loan-rating correlation
 The pari-passu clause
 Grace periods
 Standstill arrangements

Types of risk & risk management systems
 Financial ratio’s & default
 Altman-Z score application
 Use of special purpose vehicles
 Choice of national law and governing jurisdiction
 Claims and remedies
 Misrepresentations

Cases judging from different perspectives will be discussed

 Fiduciary duties
 Act of God or other situations triggering unenforceability
 Discussion of different scenario’s
 Review strategies how to respond
 LT relationships & game theory

Day 3

Structural issues and subordination arrangements
 Structural subordination
 Substitutes for guarantees
 Capital commitments
 Comfort letters
 Put options, offtake agreements and other contractual support
 Mezzanine and/or equity-linked debt arrangements & term sheet
 Intercreditor arrangements

Financial risk & documentation
 Measuring financial risk
 Private firms
 Public firms
 Conglomerates
 Structuring the loan compensation
 Credit portfolio management & documentation
 Ratings for private firms
 Forensic investigations
 Judging the strategic outlook of a firm and direct relationship with its financial position
 Strategic risk taking
 Compensation bandwidths
 Dealing with emerging markets

Loan documentation in relation to alternative investments
 Judging leverage
 Seizing assets
 Private equity versus hedge fund particularities
 Documentation requirements
 The buy-out sphere
 What can we learn from the upcoming AIFNM directive in the EU?

Loan documentation for real estate/project finance/infrastructure finance arrangements
 Real estate financing & risk identification
 Loan to value ratio’s & documentation
 Pre-sale market projects under current economic conditions
 RE project timeliness
 Pre-agreed standstill arrangements
 Documentation of the different tranches of debt
 PPP/PFI/PIPE arrangements
 Impact of foreign arrangers/contractors
 Syndication models
 Legal risk analysis

Wrap-up & conclusion

Delivery:	In house
Category:	Advanced Corporate Finance