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Equity Financing: Using Stocks, Bonds, Mutual Funds and Other Investment Vehicles as Collateral

Navigating the Interplay of Regulations U and X, Rule 144, and UCC Articles 8 and 9 for Lenders and Borrowers

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Thursday, July 21, 2016

Recorded event now available

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This CLE course will prepare business and finance counsel in structuring loan transactions in which stock, bonds, mutual funds and other investment vehicles are used as collateral to secure the loan. The program will address how to properly perfect the security interests while complying with Regulations U and X, Rule 144, and UCC Articles 8 and 9.

Description

Using stock, bonds and similar equity interests as collateral presents challenges due to unique planning and documentation issues, including consideration of securities laws and entity statutes.

Counsel must navigate the interplay between UCC Articles 8 and 9, Rule 144 and Margin Regulations (U and X)—and understand the bankruptcy safe harbors and foreclosure issues to protect their clients and issue opinions.

Corporate financing for tender offers, corporate acquisitions, mergers, stock buy backs, and going-private transactions require lenders and borrowers to incorporate knowledge of the regs to structure the loan agreement.

Listen as our panel of finance practitioners provides best practices for advising clients in structuring loan transactions in which securities, bonds and other investment vehicles are used as collateral. The panelists will offer their perspectives and experiences on the potential pitfalls involved in creating and perfecting the security interests while complying with Margin Regulations, Rule 144 and UCC Article 8.

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Outline

  1. Primary regulatory issues related to using collateral as investment vehicle interests to secure a loan
    1. Margin Regulations U and X
    2. Rule 144
    3. Bankruptcy safe harbors
  2. Requirements and methods for creating security interests in stock and other investment vehicles
  3. Lender remedies upon default
  4. Best practices for structuring the loan agreement and avoiding common pitfalls

Benefits

The panel will review these and other key issues:

  • What are the regulatory issues related to using collateral as investment vehicle interests to secure a loan that are relevant to counsel?
  • What are the best practices for finance counsel in structuring the loan agreement?
  • What steps should lenders’ counsel take to avoid common pitfalls in creating and perfecting security interests in stock, bonds and other investment vehicles?

Faculty

Ransom, R. Todd
R. Todd Ransom
Partner
Haynes & Boone

Mr. Ransom concentrates his practice in the areas of finance and energy. His finance practice includes the...  |  Read More

Unterberg, Craig
Craig S. Unterberg
Partner
Haynes and Boone

Mr. Unterberg concentrates his practice in the areas of representing borrowers and lenders in secured and...  |  Read More

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