Loan participation transactions allow a lender to provide its customers with loans that exceed such lender's legal or internal lending limits, or participate in loans in new or underrepresented industries or geographic areas. This one-day seminar will provide you with an understanding of the fundamentals of loan participation and assignment transactions, the legal and practical issues that you should consider and the underlying documents that govern such transactions. With this understanding, you will have the tools needed to make better decisions in this competitive lending environment.
- Loan participations and how they differ from assignments
- Issues facing participants and lead lenders
- Regulatory concerns with participations
- Diligence issues for participants
- Negotiating participation agreements
- The attendee will be able to discuss participation and assignment agreements.
- The attendee will be able to identify bankruptcy concerns.
- The attendee will be able to review loan participation basics and regulatory issues.
8:30 a.m. - 9:30 a.m.
I. Loan Participation Basics
A. What Is A Loan Participation?
B. How A Loan Participation Differs From An Assignment
C. Why Participate?
D. Typical Form Of Transaction
9:30 a.m. - 10:20 a.m.
II. Regulatory Issues
A. FASB 140: Current Standards
B. FASB 140: Proposed Changes
C. Legal Lending Limit Requirements
D. Regulation W: Loan Participations With Affiliates
E. State Regulatory Requirements
10:20 a.m. - 10:30 a.m.
10:30 a.m. - 11:15 a.m.
III. Participation Pitfalls
A. Fiduciary Duties Of Lead Lender
B. Lack Of Privity With Borrower: Participant's Credit Risk
C. Credit Administration Issues
D. Replacing A Lead Lender
11:15 a.m. - 12:00 p.m.
IV. Bankruptcy Concerns
A. Participant's Role In Borrower's Bankruptcy
B. Participant/Lead Bankruptcy Issues
12:00 p.m. - 1:00 p.m.
Lunch (On Your Own)
1:00 p.m. - 2:00 p.m.
V. Due Diligence Considerations
A. Credit Analysis Of Borrower: Who Is Responsible?
B. Analysis Of Lead Lender
C. Lead Lender's Analysis Of Participant
D. Securing A Participant's Obligations
2:00 p.m. - 2:50 p.m.
VI. Participation Agreements And Assignment Agreements
A. Analysis Of Form Of Participation Agreement
B. Exit Provisions
1. Last In/First Out Participation
2. Last In/Last Out Participation
3. Pro Rata Participation
C. Amendments, Waivers And Modifications To Loan Agreements: What Role For The Participant?
D. Control Of The Credit: What Role For The Participant?
E. Analysis Of Form Of Assignment Agreement
2:50 p.m. - 3:00 p.m.
3:00 p.m. - 4:00 p.m.
VII. Significant Cases And Analysis
4:00 p.m. - 4:30 p.m.
VIII. Questions And Answers