Yank the bank definition

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Blocking majorities

It is important to consider the underlying finance documents to determine the requisite majorities of creditors which can block certain actions necessary to maintain an effective standstill, and to complete a successful restructuring (see Practice Notes: Key elements of a standstill agreement).Initial stepsIncreasingly companies have many different types of creditor, each with conflicting motives.It is important to review the finance documents and any intercreditor agreements (see Practice Note: Intercreditor agreements for R&I lawyers) to determine for each tranche of debt:•what majorities are required from each creditor constituency to waive any covenant breaches/events of default (common terms in a standstill agreement) or amend the finance documents•the process for enforcement actions plus the role of any security trustee/collateral agent/facility agent•whether there are any buy-out rightsA valuation (see Practice Note: Where the value breaks and negotiating strength) will identify creditors likely to exercise blocking rights; those close to where the value breaks will maximise any blocking rights they have to secure a better deal.Majorities in syndicated loansFor loans provided by a group of...

Best Practice Guide for Term Sheet Completeness—Explainer

Best Practice Guide for Term Sheet Completeness—Explainer The Loan Market Association and European Leveraged Finance Association published a guide in November 2020 (updated in 2021) entitled Best Practice Guide for Term Sheet Completeness, for use on leveraged finance transactions. The aim of the Best Practice Guide is to assist investors in the investment decision by ensuring that leveraged finance term sheets contain as much detail as possible as to key terms. To this end, the Best Practice Guide sets out a list of those provisions identified by investors as being of material importance to their investment decision. The Best Practice Guide presupposes a high level of understanding of leveraged finance terms and jargon. The Best Practice Guide lists the terms that should be included, and under each term sets out a bullet point list of the various points that the term sheet should cover in relation to that particular term. This Practice Note lists out the terms referred to in the Best Practice Guide and, under the heading Provision,...

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What factors should a lender consider if it is asked to waive a default under a loan agreement?

What factors should a lender consider if it is asked to waive a default under a loan agreement? This Q&A discusses the factors a lender will need to consider if it is asked to waive an event of default under a loan agreement. The following Practice Notes provide further guidance on some of the issues that arise where a lender considers a waiver request: • Debt waivers, extending maturity and debt rescheduling • Covenant waivers and resets • Amendments, waivers and consents—overview; and • How to prepare to enforce security Summary This Q&A looks at the key issues for a lender faced with a request for a waiver of a default under a loan agreement. It discusses the provisions of the loan agreement that should be checked, the practical issues that a lender should consider and some items that might be included in any waiver agreement between the lender and the borrower. Doing nothing about a default Once a default occurs under a loan agreement, a...

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Banking & Finance around the world—Switzerland

Banking & Finance analysis: What is the current condition of the Swiss banking and finance sector? We asked Jürg Frick, partner at Homburger in Zurich, about the state of the loan markets and recent market developments in Switzerland as part of our Banking and Finance markets around the world series.