The Handbook of International Loan Documentation: Second Edition (Global Financial Markets)

Syndicated Loans Are Loans Provided By A Group Of Lenders And Administered Or Arranged By Investment Banks And Are One Of The Key Ways In Which Firms Raise Capital For Growth. Agreements Can Range From Straightforward 'vanilla' Transactions, To Highly Complex Agreements With Numerous Payout Structures And Conditions, And A Key Part Of The Process Is Documentation And Negotiation. This New Edition Provides A Highly Practical And Comprehensive Resource For Bankers And Lawyers, At All Levels Of Experience, Involved In International Lending. The Author Covers The Terms Of International Loan Documentation With Comprehensive Explanations Of The Purpose Of The Provisions, And Of Areas That May Require Negotiation, With An Emphasis On The Wording Of The Loan Market Association (lma) Documents. It Also Covers Term Loans And Revolving Credits And Includes Comparisons Of The Provisions Required For Investment Grade Borrowers And For Asset And Project Based Credit Risks, And Includes Discussion Of Security, Quasi Security, And Legal Opinions. General Introduction -- Interpretation -- The Facility -- Utilisation -- Repayment, Prepayment, And Cancellation -- Costs Of Utilisation -- Additional Payment Obligations -- Guarantee -- Representations, Undertakings And Events Of Default -- Changes To Parties -- The Finance Parties -- Administration -- Governing Law And Enforcement -- Schedules. Sue Wright. Includes Bibliographical References And Index. Cover 1 Half-Title 2 Title 4 Copyright 5 Dedication 6 Contents 8 Introduction 18 General Introduction 18 Section 1: Principal Types of Loans 20 Section 2: Loan Agreement Overview 25 Section 3: LIBOR-based Lending 32 Section 4: Scope of the Loan Agreement 41 Section 5: Optional Provisions Published by the LMA in ‘Kit’ Form 49 Section 6: Commodifi cation of Debt 53 Section 7: Asset and Project Finance 57 Section 8: Quasi Security and Financial Indebtedness 60 PART 1 Administrative Provisions 66 1 Interpretation 68 Clause 1: Defi nitions and Interpretation 68 Section 1 – An Introduction 68 Section 2 – Th e LMA Defi nitions 71 2 Th e Facility 95 Clause 2: Th e Facility 95 Clause 3: Purpose 99 Clause 4: Conditions of Utilization 100 3 Utilization 108 Clause 5: Utilization 108 Clause 6: Optional Currencies 111 4 Repayment, Prepayment and Cancellation 115 Clause 7: Repayment 115 Clause 8: Prepayment and Cancellation 116 5 Costs of Utilization 123 Clause 9: Calculation of Interest 123 Clause 10: Interest Periods 126 Clause 11: Changes to Calculation of Interest 129 Clause 12: Fees 136 6 Additional Payment Obligations 138 Clause 13: Tax Gross up and Indemnities 138 Section 1 – An Introduction 138 Section 2 – Th e Clause 142 Section 3 – FATCA 148 Clause 14: Increased Costs 150 Section 1 –An Introduction 150 Section 2 – Th e Clause 152 Clause 15: Indemnities 154 Clause 16: Mitigation 155 Clause 17: Costs and expenses 155 PART II Guarantee, Representations, Undertakings and Events of Default 158 7 Guarantee 160 Clause 18: Guarantee and Indemnity 160 8 Representations, Undertakings and Events of Default 169 Clause 19: Representations 169 Section 1 – An Introduction 169 Section 2 – Th e LMA Term Loan Representations 178 Clauses 20–22: Undertakings – Introduction 192 Clause 20: Information Undertakings 196 Clause 21: Financial Covenants 200 Clause 22: General Undertakings 213 Section 1 – Th e LMA Undertakings 213 Section 2 – Other Common Undertakings 229 Clause 23: Events of Default 237 Section 1 – Introduction 237 Section 2 – Th e LMA Events of Default 240 PART III Boilerplate and Schedules 264 9 Changes to Parties 266 Clause 24: Changes to Lenders 266 Section 1 – Methods of Transfer 266 Section 2 – Transfers of Secured Loans 274 Section 3 – Th e LMA Term Loan 279 Clause 25: Changes to the Obligors 285 10 Th e Finance Parties 288 Clause 26: Role of Agent and Arranger 288 Clause 27: Conduct of Business by the Finance Parties 294 Clause 28: Sharing Among Finance Parties 294 11 Administration 297 Clause 29: Payment Mechanics 297 Clause 30: Set off 299 Clause 31: Notices 300 Clause 32: Calculations and Certifi cates 300 Clause 33: Partial Invalidity 301 Clause 34: Remedies and Waivers 301 Clause 35: Amendments and Waivers 302 Clause 36: Confi dentiality 304 Clause 37: Counterparts 305 12 Governing Law and Enforcement 306 Clause 38: Governing Law 306 Clause 39: Enforcement 307 13 Schedules 310 Schedule 1: Parties 310 Schedule 2: Conditions Precedent 310 Schedule 3: Requests 314 Schedule 4: Mandatory Costs Formula 315 Schedule 5: Form of Transfer Certifi cate 315 Schedule 6: Form of Assignment Agreement 315 Schedule 7: Accession Lett er 315 Schedule 8: Form of Resignation Letter 316 Schedule 9: Form of Compliance Certificate 316 Schedule 10: Existing Security 316 Schedule 11: Form of Confi dentiality Undertaking 316 Schedule 12: Timetables 317 Schedule 13: Legal Opinions 317 Section 1 – Introduction 317 Section 2 – Form of Opinion 320 Appendix 1 Some English Law Concepts 332 Section 1: Some Basic Concepts 332 Section 2: Security 344 Section 3: Guarantees 356 Appendix 2 Glossary of Terms Used in International Lending 363 Bibliography 391 Index 394 Syndicated loans are one of the key ways in which firms raise capital for growth. Agreements can range from straightforward 'vanilla' transactions, to highly complex agreements with numerous payout structures and conditions, and a key part of the process is documentation and negotiation. This new edition provides a highly practical and comprehensive resource for bankers, lawyers, and corporate treasurers, at all levels of experience involved in international lending. The author covers the terms of international loan documentation with comprehensive explanations of the purpose of the provisions, and of areas that may require negotiation, with an emphasis on the wording of the Loan Market Association (LMA) documents. It covers term loans and revolving credits and includes comparisons of the provisions required for investment grade borrowers and for asset and project-based credit risks, and includes discussion of security, quasi security, and legal opinions.