Syndicated Loan Term Sheet

Syndicated Loan Term Sheet. The financial terms negotiated between the arranging bank and the borrower are contained in the term sheet Term Sheet Template Download our term sheet template example A term sheet outlines the basic terms and conditions under of an investment opportunity and nonbinding agreement The term sheet details the amount of the loan repayment schedule Debt Schedule A debt schedule lays out all of the debt a.

Initial InvestigationsThe Term SheetThe Facility AgreementConditions Precedent→ Each borrower assigned an account officer within bank who provides consistent point of contact for the borrower’s officers ⇒ Account officer builds relationship with borrower’s officers ⇒ Account officer will put together basic package of terms for the proposed loan e ✔ Amount and term of loan ✔ Repayment dates ✔Principal financial covenants ⇒ Will be based largely on accounts officer’s knowledge of the borrower → The account officer’s proposal then undergoes a credit analysis ⇒ Some banks will have a separate committee which analyses lending proposals Many banks will rely on the account officer often with the aid of a credit assessment manual providing checklists for points covered→ Manual includes policy guidelines peculiar to the bank e mandatory inclusion of material adverse change or cross default clause→ Sources of info for credit analysis (depends on borrower and proposed deal) ⇒ Borrower’s most recently published accounts ⇒ Current information such as interim ac → Purpose The purpose of the term sheet is to set out the main terms of the facilities in principle When it is approved by the borrower it is used by the bank’s solicitor as a guide to drafting the facilities agreement→ Document which records in writing the principal terms of a transaction not intended to be exhaustive e ✔ purpose ✔ type of facility ✔ currency and amount ✔ availability ✔ repayment/prepayment and cancellation provisions ✔ margin ✔ representations ✔ undertakings and Events of Default ✔ conditions precedent→ Signed by parties to the transaction→ NOT usually intended to be legally binding ( but for confidentiality and costs/fees)→ Usually attached as an Appendix to a short letter (the commitment letter or mandate letter) ⇒ Commitment Letter contains legally binding terms required at outset of lending process 1 Clarity ❖ Focus minds of borrower and lender to fundamental issues If even pricing/structure of loan cannot beagreed no point doing extensive d Overview of a Facility Agreement on all material terms needed❖ In common with most commercial contracts the detailed provisions of a facility agreement will betailored to the specific requirements of the parties❖ Will always be the lender’s lawyers who draft the facility agreement ✔ Overdraft facility✔ Term loan✔ Revolving credit facility ⇒ Additional features known as ‘ bells and whistles’ certain preagreed conditions) ALWAYS NEED TO AMEND THE FACILITY AGREEMENT TO ACCORD WITH THE TERM SHEET AS THIS HAS BEEN SIGNED A → Conditions precedent (CPs) are specific conditions that the lender requires the borrower to fulfill before the borrower can draw down capital from the loan facility (cannot “utilize”)→ Conditions to the borrower being able to borrow the money (not a condition to the facility coming into force)⇒ Usually in the form of borrower providing documents/evidence to show that they have complied with these conditions (e something that came up in due diligence that has now been resolved) ⇒ A form of backing up representations and warranties NB Conditions Precedent are not conditions for the facility agreement to take effect but for thelender to make the draw downs availableThe Facility Agreement will come into effect as soon as it isexecuted by all the parties – but the borrower will not be able to access the capital UNLESS and untilthe Condition Precedents are satisfied Advantages (for the bank) ✔ Borrower is locked in into the main provisions of the agreement so that bank’s FEE.

Syndicated Loan Participants, Advantages, How it Works

Term sheet syndicated term loan preexport finance facility A sample term sheet with integrated drafting notes for the grant of a term loan by a syndicate of lenders for financing the production of commodities by the borrower.

BDF WS2 Syndicated facilities agreement & term sheet

A standard form of term sheet for syndicated senior secured credit facilities (including a revolving credit loan and term loans) This Standard Document has integrated notes with important explanations and drafting and negotiating tips Alert This Standard Document refers to LIBOR Drafters should be aware that US federal agencies have encouraged banks to cease entering into new contracts that use LIBOR as a reference rate as soon as practicable and in any event by December 31 2021.