About the Course
Introduction
This CLE webinar will take a deep dive into affirmative and negative covenants in loan agreements that are designed to preserve the creditworthiness of the borrower and protect the lender against downside risk. The panel will review the language and purpose of commonly used affirmative and negative covenants and provide negotiating and drafting strategies for borrowers and lenders relating to these loan terms.
Description
When entering into a loan agreement, lenders must determine what negative and affirmative covenants are important to ensure the borrower will continue to be able to repay the loan. Borrowers must also understand the nuances of these covenants to avoid issues in complying with these terms down the road.
Affirmative covenants are activities the borrower should do to maintain the financial health and well-being of the business and allow the lender to stay informed on the business' performance. Negative covenants are designed to prevent borrowers from taking actions that put their creditworthiness at risk, such as incurring additional debt or selling assets.
It is important for borrowers and lenders to carefully consider and understand what affirmative and negative covenants to include in a loan agreement rather than simply relying on stock or boilerplate terms. Counsel representing borrowers and lenders should design these terms and any exceptions or carveouts to accommodate the specific circumstances of each transaction.
Listen as our authoritative panel reviews common affirmative and negative covenants in loan agreements and best practices for negotiating and drafting these terms to meet the circumstances of various types of transactions.
Presented By
Ms. Hughes represents some of the world’s largest financial institutions in connection with the structuring, negotiation and documentation of complex domestic and multi-jurisdictional financing transactions, including subscription-secured credit facilities with top-tier private equity and real estate funds. She also has experience representing financial institutions and commercial borrowers in syndicated credit facilities, term loans, construction loans, real estate secured loans, hybrid collateral facilities, and acquisition financings.
Mr. Monier represents financial institutions and borrowers in commercial loan transactions. He has represented agents, lenders and borrowers in syndicated credit transactions involving revolving credit facilities, term loans, letters of credit, and acquisition financings. Mr. Monier has helped lenders enter into loan facilities, represented agents in amending and restating existing credit agreements, and aided borrowers in financing for acquisitions of over 75 companies. He has experience in secured and unsecured credit facilities to real estate investment funds and to the hospitality industry.
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Ms. Shapiro represents borrowers, financial institutions and private equity in a wide range of commercial finance transactions. Her practice includes M&A and leveraged financings, general working capital facilities, commercial real estate loans and securitizations, construction lending, public company representations, restructurings and other corporate financing matters.
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Ms. Simmons is a Chambers-ranked, Band 1 banking and finance lawyer based in Denver, Colorado with more than 18 years of experience representing lenders, agents, borrowers, private credit providers, and private equity sponsors in leveraged finance, acquisition financing, and complex credit transactions. Known for her practical, solution-driven approach, she provides her clients with strategic counsel that cuts through complexity to deliver results. Ms. Simmons's practice covers the full spectrum of leveraged and sponsor-driven loan transactions, including acquisition financings, asset-based lending (ABL), reserve-based lending (RBLs) in the energy sector, private credit facilities, and 1st and 2nd lien and split-lien collateral structures. She regularly handles middle-market and large-cap credit facilities, cross-border financings, and multi-tranche debt structures.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Monday, January 11, 2027
- schedule
1:00 PM ET/10 AM PT
I. Overview: designing covenants for various types of transactions
II. Affirmative covenants
III. Negative covenants
IV. Common carveouts or exceptions
V. Negotiating and drafting strategies for borrowers and lenders
The panel will review these and other key issues:
- What are common examples of affirmative and negative covenants included in loan agreements?
- What are key considerations for lenders when adding negative or affirmative covenants to a loan agreement?
- Do borrowers have any leverage when negotiating negative or affirmative covenants?
- What exceptions or carveouts should lenders consider when structuring affirmative or negative covenants?
Related Courses
Affirmative and Negative Loan Covenants: Customizing Obligations and Restrictions Specific to the Transaction
Monday, January 11, 2027
1:00 PM ET/10 AM PT
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