General Issues
| Title | Description |
|---|---|
| Scope | This nugget looks at the issue of the scope of the loan agreement – that is, what companies in the borrower’s group might find their businesses affected by it, and what companies might affect the availability of finance under it. It discusses the extension of some provisions in the loan agreement to Group members which are not Obligors and considers the concept of Excluded Companies. It also looks at whether the “Company” should be the ultimate holding company and the importance of the issue of change of ownership or control of the Company. |
| Introduction - Financing options and loan overview | This nugget compares some of the main issues in the choice between debt and equity; long term debt and current liabilities; and financing through the capital markets or the loan markets. It also provides a high level overview of the structure of the loan agreement and the borrower's main concerns in relation to it testing agreement and the borrower's main concerns in relation to it. |
| Structural Subordination | This nugget explains structural subordination and the importance of having a claim against the operating company. It looks at the problems with upstream guarantees and the places in which due diligence needs to be conducted on this issue. It also looks at the impact which structural subordination is likely to have on the undertakings in the loan agreement. |
| Defaulting Lenders | This nugget looks at a number of areas of the document which caused concern during the financial crisis of 2008, and some of the changes which have been suggested as a result. It covers: defaulting lenders whose commitment has not yet been fully drawn; Agents in financial difficulty; cashless rollovers of revolving credits; defaulting lenders participating in letter of credit facilities; and interest calculation in times of market disruption.
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