Description
Unitranche financing combines aspects of a traditional first-lien/second-lien structure into a single credit facility with one set of loan documents, one shared lien, shared (or "blended") interest payments, and one covenant package. The unitranche structure allows lenders to tailor their intercreditor rights depending on the size of their respective first-out and last-out facilities and other deal-specific factors in an AAL.
Key deal points include tranching, payment waterfalls, interest and fee skims, voting, buyouts, remedies, and standstill and assignment provisions. Amid a fast-growing market, the LSTA has published a form AAL for general use among unitranche lenders. As an attempt at reflecting the "market" for standard agreement provisions, the LSTA form offers a good starting point for drafting and negotiating an AAL.
Open questions regarding enforcement of AALs in bankruptcy include plan classification and voting, adequate protection, and the lender's entitlement to post-petition interest. Each lender's counsel must understand the AAL issues associated with these transactions.
Listen as our authoritative panel of finance counsel guides you through the current market terms of the AAL concerning the LSTA form. The panel will also look at the latest developments in the enforceability of AALs in bankruptcy and other bankruptcy-related risks.
Presented By
Mr. Eguchi is a partner in the Corporate & Financial Services Department and a member of the Finance Department. He has represented hedge funds, banks, financial institutions and other parties in connection with chapter 11 and 15 commercial bankruptcy cases, out-of-court workouts, distressed asset sales and financing transactions. Mr. Eguchi regularly advises buy and sell-side firms on investments in distressed and stressed credits. He also has substantial experience related to cross-border insolvencies, derivatives and other “safe harbor” financial contracts, structured finance transactions and pensions-related issues.
Mr. Goren has experience in all facets of complex chapter 11 reorganizations. He has represented official committees, debtor-in-possession lenders, and debtors in a number of prominent insolvency matters. Mr. Goren has represented parties in restructurings in industries such as real estate, mortgage lending, transportation, technology, telecommunications, retail, and energy.
Mr. Kimball represents financial institutions, agent banks and other institutional investors in connection with corporate and commercial financial transactions. He regularly counsels clients on matters involving senior and subordinated debt financings, acquisition financings, asset-based and working capital financings, structured financings and other forms of debt financing.
Mr. Mcllwain practices in the area of corporate finance and litigation, with a particular emphasis on bankruptcy and restructuring matters. He represents both debtors and creditors in Chapter 11 proceedings across the country, as well as in numerous out-of-court restructurings. Mr. McIlwain routinely advises finance clients on front-end deal structuring and intercreditor issues. Mr. McIlwain also represents clients in business litigation matters, both in state and federal court. His industry experience includes oil and gas, healthcare, manufacturing, food and agriculture, retail and financial services.
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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
Thursday, February 2, 2023
- schedule
1:00 p.m. ET./10:00 a.m. PT
- Structuring key provisions of AALs
- Tranching
- Payment waterfalls
- Interest and fee skims
- Voting
- Buyouts
- Remedial standstill
- Assignments
- Enforceability of AALs in bankruptcy and bankruptcy-related risks
- Recent case law developments
- Subordination
- Post-petition interest
- Credit bid provisions
- Plan classification
- The LSTA form of AAL
The panel will review these and other key issues:
- What are the essential terms to address between lenders in an AAL?
- In what respects does the new LSTA form AAL reflect the "market," and how does it deviate?
- What are the latest case law developments on the enforceability of AALs in bankruptcy?
- What are the critical considerations in negotiating "split lien" AALs?
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