- Commercial Lending
- Remote or in person
- Drafting a credit agreement
- General loan provisions
- Exhibits & schedules
- Loan assignment processes
- Reps & warranties
- Affirmative covenants
- Negative covenants
- Financial covenants
- Covenant-lite loans
- Springing covenants
- Current Ratio
- Interest Coverage Ratio
- Fixed Charge Coverage Ratio
- Leverage Ratios
Before the Session
Prepare the Attendees
Send the attendees an invitation for the session. Include this link, which has the videos and exercise they’ll need to prepare.
Watch the videos and read the exercise so you’re familiar with the Hotshot material.
Covenants and Events of Default
A review of covenants and events of default, including affirmative and negative covenants, a detailed look at financial covenants, and the interplay between covenants and events of default. This course also looks at the concepts of “covenant lite” and “springing covenants” as well as the difference between a Default and an Event of Default.
The credit agreement is the main agreement in a commercial lending transaction. This course covers the contents of a credit agreement, including a walkthrough of a typical credit agreement.
Covenants and Events of DefaultPDF
During the Session
- What are some of the different ways that the makeup of the lender group can change over the life of the loan?
- What is meant by “Sacred Rights”?
- Why do credit agreements have covenants and Events of Default sections?
- What are some of the standard affirmative covenants found in most loan agreements? What about the standard negative covenants?
- What kinds of exceptions do the parties sometimes negotiate to negative covenants?
- What kinds of covenants are typically excluded from covenant-lite loans?
- What purpose do financial covenants serve in lending agreements? What are some common financial covenants?
- What are some of the more common Events of Default?
- When an Event of Default happens, what are some of the lender’s options?
- How do Defaults differ from Events of Default?
Part 2: Group Exercise
- Anecdotes and war stories (e.g., about a near-disaster or a tough negotiation)
- General practice tips (dos and don’ts)
- Firm-specific guidance and practices
After the Session
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