Loan Document Negotiation Essentials: A Guide for Borrower’s Counsel (On-Demand)

Course Description

This course equips attorneys representing borrowers with the practical skills and knowledge needed to negotiate and close debt finance transactions. Designed for new attorneys and professionals entering the corporate finance practice, the course is intended to cover the full lifecycle of a debt financing from the borrower’s perspective—from negotiating commitment papers and credit agreement terms through managing a successful closing. Participants will gain a working understanding of how to structure favorable terms, navigate covenant negotiations and protect borrower flexibility, and run an efficient closing.

Principles

• Protect the Borrower’s Flexibility
  • Negotiate credit agreement terms, covenants, baskets, exceptions, and EBITDA definitions to preserve the borrower’s ability to operate, grow, make investments, incur debt, and respond to changing business conditions.
• Align Financing Terms with the Overall Transaction
  • Ensure commitment letters and term sheets provide a reliable path to funding, minimize financing-condition “outs,” and remain consistent with the acquisition agreement and transaction timeline.
• Balance Lender Protections Against Practical Business Needs
  • Evaluate representations, warranties, financial and negative covenants, mandatory prepayments, and events of default from the borrower’s operational perspective—focusing on materiality thresholds, cure periods, exceptions, and appropriate limitations.
• Understand the Full Financing Structure and Security Package
  • Identify how the type of facility, borrowing base, collateral package, perfection requirements, and mandatory prepayment provisions affect the borrower’s liquidity, assets, and ongoing flexibility.
• Manage the Deal Through an Efficient, Predictable Closing
  • Treat closing as a process rather than a final event: establish milestones, coordinate conditions precedent and transaction approvals, manage signing versus closing requirements, and anticipate common documentation and execution pitfalls.

Syllabus

1. Debt Finance Landscape — Types of debt facilities, key transaction structures, and the roles of parties in leveraged finance
2. Commitment Letters and Term Sheets — Negotiating binding commitments, limiting financing condition “outs,” and aligning deal terms with the acquisition agreement
3. Anatomy of the Credit Agreement — Purpose, structure, and how the agreement balances lender protections with borrower operating flexibility
4. Covenants and Borrower Flexibility — Negotiating negative covenants, financial covenants, EBITDA definitions, and carving out adequate baskets and exceptions
5. Borrowing Base and Mandatory Prepayments — Cash flow vs. asset-based structures, excess cash flow sweeps, and negotiating reinvestment rights and step-downs
6. Representations, Warranties, and Events of Default — Drafting reps that can be “brought down” at future borrowings, and managing default triggers, grace periods, and cure rights
7. Collateral Documents and Perfection of Security Interests — Drafting effective collateral documentation, UCC filings, control and possession requirements
8. Closing Process and Timeline — Signing vs. closing, key milestones, closing conditions, transaction approvals, and common pitfalls to avoid