Commercial Lending: Essential Elements and Key Provisions in Syndicated Credit Agreements

The corporate loan market has changed dramatically over the past three decades. Rather than loans held by a single bank, larger corporate loans today are syndicated to other institutional lenders. This has led to a surge in growth in the volume of loans originated in the primary market and subsequently traded in the secondary market, facilitated in part by the standardization of loan and trading documentation. This has led to a surge in growth in the volume of loans originated in the primary market and subsequently traded in the secondary market, facilitated in part by the standardization of loan and trading documentation. For nearly 25 years, the Loan Syndications and Trading Association (LSTA), the trade association for the US market, has been standardizing the documentation that is used to originate loans in the primary market and trading those loans in the over the counter secondary market. The volume of LSTA standard agreements has grown enormously over the years and has contributed significantly to the growth of outstanding loans in the primary market and the volume of secondary loan trading.

This course will provide an overview of the LSTA's Model Credit Agreement Provisions, which have gradually been expanded over the years, and the LSTA's revolving credit facility agreement, the LSTA's first complete credit agreement which was published in 2017. The speakers will focus on select provisions that are important for the corporate loan market and include a discussion on the different types of credit facilities, payment mechanics, representations and warranties, affirmative and negative covenants, events of default and remedies, inter-lending issues, and defaulting lender mechanics.

Learning Objectives:

1. Assess the basics of and interplay between the primary loan market and secondary loan trading market
2. Examine the unique aspects of syndicated lending and the relationship among the administrative agent and the lenders
3. Analyze the basics of a credit agreement and the importance of certain provisions that impact the secondary trading of loans
4. Review commonly negotiated provisions in syndicated loan documentation