ESG in Fund Finance: New Principles and Guidance for Structuring and Drafting Sustainability-Linked Loans (SLLs)
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Banking and Finance
- event Date
Tuesday, July 18, 2023
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE course will discuss ESG in fund finance, and specifically how to structure and draft sustainability-linked loans (SLLs) to achieve ESG-related objectives that comply with the new principles and guidance.
Ms. McShane represents major banks and financial institutions in the structuring, negotiation and documentation of subscription credit facilities. She also has experience representing investment banks and private equity groups in their role as issuer, underwriter and mortgage loan seller in both public and private securities offerings. Ms. McShane has also represented clients in other asset-backed finance and corporate transactions and has practiced in both London (England) and Dublin (Ireland).
Ms. Basran is a partner in Cadwalader's Financial Services Group. Combining her substantial experience as a banking and finance lawyer, she advises and works with financial institutions on incorporating innovative financing and impact investment structures anchored in rigorous impact outcomes into mainstream transactions. Ms. Basran advises clients on ESG strategies, policies, disclosure and reporting, ESG-related transactions and products as well as integration of ESG into investment processes and systems.
The panel will discuss the Loan Syndications & Trading Association (LSTA) and Loan Market Association (LMA) Sustainability-Linked Loan Principles (SLLPs) and related guidance, and the recently published LSTA and LMA SLL drafting guidance. In addition, we will examine the challenges faced in selecting key performance indicators, setting sustainability performance targets, agreeing on sustainability-related reporting obligations, the role of the sustainability agent, the consequences of sustainability-related breaches, and how to identify and prevent greenwashing.
SLLs are any type of loan instrument that incentivizes the borrower's achievement of ambitious, predetermined sustainability performance objectives. SLLs therefore encourage borrowers to contribute to sustainability. For such a role to be played and for the market to thrive, integrity is of the utmost importance.
Listen as our authoritative panel discusses the nuances of documenting and administering SLLs.
- Why funds and lenders are increasingly including ESG criteria in commercial loans
- Use of proceeds loans and SLLs
- The core components of the SLLP
- SLL Model Provisions: best practices
- Challenges in structuring SLLs
- Mitigating the risk of greenwashing
- What’s next for SLLs?
The panel will review these and other relevant issues, including:
- What are the benefits to borrowers and lenders in addressing ESG considerations in a loan transaction?
- What are the LSTA and LMA SLLPs and the guidance that has been published with respect thereto, and what are the key differences?
- What is the LSTA and LMA guidance on drafting SLL-related provisions for U.S. and UK-style credit agreements?
- How to structure ESG in fund finance. For example, what are some sample ESG targets used in fund finance, and how do these vary depending on the type of facility?
- What is the role of the sustainability agent?
- What are the reporting requirements?
- How can the failure to meet performance targets be addressed in the loan documents?
- What is greenwashing and how can it be prevented and mitigated against?
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