Structuring Financial Covenants: Purposes, Types, Definitions, and Uses in Loan Documents
Maximizing Borrower Protection and Lender Remedies
A live 90-minute premium CLE video webinar with interactive Q&A
This CLE course will provide borrowers' and lenders' counsel with a review of the use of EBITDA, leverage ratios, and other metrics in loan documentation and uses of financial covenants. The panel will outline critical issues relating to structuring financial covenants, related definitions, and use in commercial loans.
Outline
- Purpose of financial covenants
- Types of financial covenants
- Financial definitions: net income, EBITDA, fixed charges
- Covenant-lite transactions
- Distinctions between cash flow and asset-backed loans
- Mandatory prepayments: excess cash flow
- Equity cure rights
Benefits
The panel will review these and other key issues:
- Why have financial covenants?
- What are the critical conceptual drivers that fuel the negotiation of financial covenants?
- How does understanding these key concepts help negotiate the optimal outcome for clients?
Faculty
Kristen V. Campana
Partner
Morgan, Lewis & Bockius
Ms. Campana represents a wide variety of direct and alternative lenders, particularly those involving private sources... | Read More
Ms. Campana represents a wide variety of direct and alternative lenders, particularly those involving private sources of capital, including private debt funds, hedge funds, specialty finance companies, business development companies, private equity investors, and issuers in domestic and cross-border financings across the capital structure in connection with acquisitions, leveraged buyouts, convertible debt, equity investments, letters of credit, and project financings. Ms. Campana is a frequent author and lecturer on finance issues.
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David A. Surbeck
Shareholder
Polsinelli
Mr. Surbeck represents a diverse clientele, including corporate entities engaging in forming Employee Stock... | Read More
Mr. Surbeck represents a diverse clientele, including corporate entities engaging in forming Employee Stock Ownership Plans (ESOPs) and obtaining financing and other financial services, independent ESOP trustees purchasing companies, and a variety of lenders, including regional, national and international banks, and debt funds in lending and other transactional matters. He advises lending clients in syndicated, club and single-lender transactions, covering secured and unsecured financing as well as specialty collateral structures, receivables purchases, and factoring matters. Mr. Surbeck has extensive experience with senior, split-lien and junior financing arrangements, including cash flow and asset-based financing, sponsor and acquisition financing, ESOP financing and fund finance. He counsels clients in industries, such as mortgage servicing, health care, government contracting, heavy equipment, construction and mining, energy, publishing, law firm lending and security services. Mr. Surbeck brings a wealth of knowledge to effectively navigate complex ESOP and financial transactions and provide strategic counsel to his clients.
CloseEarly Discount (through 05/02/25)