Legal and Documentation Aspects of Leveraged Finance Training Course

During this intensive course you will learn:

• The role of documentation in leveraged finance structures 
• The different steps in the process of structuring the deal
• How to handle the complexities of inter-creditor relationships
• The consequences of what happens when leverage finance transactions under perform and how to deal with them
• The rights and obligations of the various parties involved in the structure

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How the Law Works

• Common law contrasted with civil law
• The inter-relationships of statute law, common law, and the law of equity
• The essential elements of contract law
• Ultra vires, consideration, intent, illegality, uncertainty
• Deeds
• Enforcement of rights under common law

How Leveraged Finance Works

• The structure of a leveraged buyout transaction
• Private equity funds - structure and analytical process
• The senior financing tranches - A, B, C, revolver
• Stretched senior
• Second lien loans, overview of rights
• Structural vs contractual subordination
• Mezzanine, high yield instruments and warrants
• Vendor financings and/or deferred purchase obligations
• Margin ratchets
• Hedging and rights of hedging counterparties

Structuring the Deal - The Process

• Information memoranda
• Mandate letter and term sheet
• Underwriting
• 'Certain funds'
• 'Clean-up period'
• Clear market and market flex
• Security agency vs security trusteeship
• Financial covenants
• Covenant-light
• Financial assistance laws

The Loan Agreement

• Rights of the various parties upon default
• Negative pledge
• Material adverse change
• Set-off
• Cross-default and cross acceleration
• Representations and warranties
• Undertakings
• Changes to the lenders, novation, assignment, subparticipations
• Subsequent accession to documents
• Ancillary facilities
• Mandatory prepayment
• Severance
• Market disruption
• Appropriations
• Confidentiality
• Jurisdiction and enforcement
• Legal opinions

Arrangers and the Agency Clause

• Powers of the agent bank and the agency clause
• Implications of agent exceeding powers
• Disclaimers and their effectiveness
• Unfair Contract Terms Act
• Negligence, gross negligence and willful misconduct
• Vicarious liability
• Conflicts of interest
• Defaults and majority voting rights

Other Documents

• Intercreditor deed
  – payment blockage and permitted payment
  – obligations of senior creditors
  – acceleration rights of subordinated creditors
  – permitted actions
• Guarantee & indemnity
  – variations clause
  – additionality
  – the indemnity clause
  – termination and ruling off
  – implications of multiple guarantors
  – demand vs shortfall
  – conclusive evidence clause
• Mortgage debenture
  – the fixed charge
  – the floating charge
  – crystallisation

Insolvency

• The statutory law of insolvency vs the common law of contract
• The general principles of insolvency law
• Conflict of laws
• The European Insolvency Regulations
• Procedures upon default
• Voluntary schemes of reorganisation
• Preferences and transactions at undervalue

Possible financial difficulties and issues, such as payment blockage and enforcement of rights upon default present unique and extremely complex challenges that make it essential to have a detailed practical understanding of their implications. This course looks in-depth at the spectrum of issues impacting leveraged finance transactions in today's volatile market and will equip you with the tools and understanding to deal with any documentation requirements.