Representing Co-Lenders in Syndicated Credit Facilities

In most syndicated loan transactions, the loan agreement, collateral documents, and ancillary documents are negotiated with the borrower by the agent bank. As a result, co-lenders may have limited time to review and make material changes to the loan documents before closing.

Loan features of particular importance to co-lenders include waterfall and pro-rata sharing provisions and how those provisions operate under pre- and post-default scenarios. Co-lenders should also focus on the voting rights among the lenders--what actions under the loan documents require the consent of 100 percent of the lenders, require a 75% or 66 2/3rd%, a majority lenders' consent or a lesser standard such as agent discretion. Intercreditor arrangements, whether split-lien intercreditors, second lien intercreditors, or unitranches, also will be of particular concern to co-lenders.

Listen as our authoritative panel discusses the key concerns of co-lenders in a syndicated credit facility.

1. Consent rights and sacred rights
2. Waterfall and pro-rata sharing
3. Removal and addition of co-lenders
4. Roles, rights, and responsibilities
5. When things go wrong

The panel will review these and other vital questions:

• Negative covenants: role of precedent; sponsor-friendly provisions; collateral leakage concerns
• Voting rights: key issues and trends in recent cases
• Waterfall and pro-rata sharing provisions
• Intercreditor arrangements
• Regulatory and compliance concerns for co-lenders
• Special issues for letter of credit issuers