Loan Documentation

In addition to your class tuition and study materials, you will receive the following:


Case Study

• Negotiation and drafting of term sheets based on real life case studies.

Exercises

• Identification and discussion of the 5 key components of term loans using real life term loan documents

Other Extras

• Class discussion
  
• Certificate of attendance

Level: Intermediate


Synopsis:
This course is designed to equip bankers and their corporate counterparts with the technical knowledge necessary to understand, assess and negotiate the legal documents supporting the most common banking transactions.The primary focus of the course is on lending, from simple bilateral loans to syndications and leveraged lending, but it also covers other banking instruments such as derivatives.


At the end of the course participants will be able to: Understand the contents and structures of key banking documents such as forming documents, facility letters, loan and ISDA agreements and security documents . Know how to negotiate legal documents: what must be looked at, what is negotiable and what is not . Understand what legal documentation can achieve and what it can not . Understand the mechanics of guarantees and collateral and the impact of bankruptcy procedures .


Prerequisites:
None


Suitable For:
Corporate and investment bankers, structured finance transactors, risk management staff, loan administration staff, financial directors and treasurers


Know your customer

• What to look for in company formation documents: Certificate of incorporation, Certificate to commence business, Memorandum and articles of association, Signatories

Choice of law and jurisdiction
Short-term facilities: facility letters

• Is there a legal obligation to pay?
• Standard general terms and conditions: Default definition, Breech definition, Cross default types
• Lending position: Pari passu clauses-types, Negative pledge of assets, Non disposal/acquisition of assets
• Exercises and discussion

Guarantees and collateral

• Impact of Basel II: recognition of new securities for capital relief
• Guarantees
• Irrevocable guarantees - Joint and several, Possible challenges to guarantees
• Credit derivatives
• Letters of awareness/comfort/support (Legal and practical value)
• Letters of credit
• Collateral
• Definitions - securities types
• Fixed charges: Mortgages, Pledges of cash or securities, Assignments of receivables, Fixed charge over movables, Liens
• Floating charges
• Hierarchy in insolvency
• Ownership as security: Lease, Securitisation, Re-characterisation
• Which security group to choose?
• Other types of securities and structures
• Promissory notes and trade bills: Legal attributes and applications
• Structural securities: Subordinated loans and bonds, Second lien loans, Mezzanine loans
• Netting: On balance sheet netting -conditions and limitations, Off balance sheet: OTC Derivatives
• Subrogation
• Powers of attorney

Term loans

• Credit and loan markets and overview
• Bilateral vs syndicated loans
• Leveraged vs non-leveraged loans
• The syndication process and types of syndication
• Documenting loan terms
• The 5 key components: Conditions precedent: most frequent conditions, Key obligations: advances, interest and repayments - mechanics, Representations and warranties, Covenants: Information, affirmative and negative, financial etc., Default