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OnDemand Course

Potential Pitfalls in Borrowing Base Transactions

Understand the basics of ABL credit agreements and the best practices for compliance.

When negotiating a credit agreement, several factors, including the borrower's risk profile and credit ratings, impact the breadth of the affirmative, negative, and financial covenants imposed on the borrower. However, some of the most burdensome credit agreements are asset-based lending (ABL) credit agreements. The heart and soul of ABL lending is the collateral, and thus, ABL credit agreements often provide for intense lender monitoring and supervision because the borrowing base is tied to eligible assets. Under such a strict regime and without good advice from counsel, it is not uncommon for borrowers to trip an unintended default. This topic will highlight the basics of ABL credit agreements, including common provisions and pitfalls, and provide lawyers and treasury professionals with specific areas on which to focus review during negotiations. This information will also help ensure that the persons responsible for administering ABL credit facilities understand best practices for compliance with their complex provisions.

Learning Objectives

  • You will be able to identify the fundamentals of Asset Based Facilities.
  • You will be able to differentiate between eligible equipment and inventory.
  • You will be able to identify typical term sheet considerations.
  • You will be able to identify best practices in credit agreement negotiations.

94 minutes
Course Exam
Certificate of Completion
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Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

Discuss Typical Asset-Based Lending Credit Agreement Provisions and Term Sheet Considerations

  • Where to Focus Review of Term Sheets and Credit Agreements
  • Typical Definitions, Representations, Covenants and Events of Default
  • Other Negotiating Points

Formulate Best Practices Pre- and Post-Closing to Avoid Defaults

  • Credit Agreement Negotiation
  • Credit Agreement Administration

Defaults

  • Avoiding Defaults
  • Approach If Default Occurs or Is Forecasted
  • A Word on Technical Defaults

Frequent Compliance Inquiries

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Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

OnDemand Course

This course was last revised on June 1, 2021.

Call 1-866-352-9540 for further credit information.

  • CPE/NASBA - QAS Self Study 2.6 including Specialized Knowledge 2.6
     
  • Lorman Education Services is registered with the National Association of State Boards of Accountancy (NASBA) as a QAS Self Study sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: www.nasbaregistry.org. For more information regarding administrative policies such as complaint and refund, please contact our offices at 866-352-9539. CPE Credit: Maximum Credit Hours: 2.6 each session (based on a 50 minute credit hour). You must attend at least 50 minutes to obtain credit. Field of Study: Specialized Knowledge for 2.6 hours. Prerequisite: basic knowledge of the banking industry. Level of Knowledge: Intermediate. Teaching Method: Seminar/Lecture. Advance Preparation: None. Delivery Method: QAS Self Study. Please refer to the information in this advertisement for outline, course content and objectives. Upon completion of this course, you will receive a certificate of attendance. Final approval of a course for CPE credit belongs with each state's regulatory board.
     
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Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Kimberly MacLeod

Kimberly MacLeod

Hunton Andrews Kurth LLP

  • Partner with Hunton Andrews Kurth LLP
  • Practice areas include banking and finance, lending services, capital markets and securities, finance and restructuring, servicing rights financing and securitization, energy finance and securitization
  • Practice focuses on the representation of corporate borrowers in both cash flow and asset-based financings
  • Significant experience with negotiating and documenting on behalf of borrower and lender clients revolving, bridge and term loan facilities, including acquisition financings, recapitalizations and going private transactions
  • Also represents residential mortgage servicers and lenders in financing servicing advance receivables and servicing rights; additionally, she advises borrowers and lenders in debtor-in-possession financings, troubled loans, workouts and restructurings
  • Frequently speaks and writes on topics related to her practice
  • Selected among Profiles in Diversity Journal’s 2018 Women Worth Watching; Leaders in the Law, Virginia Lawyers Weekly, Class of 2017; selected among Virginia Lawyers Weekly’s 2010 “Influential Women of Virginia”; named among Virginia Business’ 2010 Legal Elite (business law); and selected in Rising Stars (banking), Virginia Super Lawyers, 2007 and 2008
  • Member, Virginia Bar Association and Richmond Bar Association; Leadership Metro Richmond, Class of 2013; member of the Board of Directors of Boaz & Ruth; member of the Board of Directors of Positive Vibe Foundation; member of the Mid-Atlantic Innocence Project Board of Directors and Screening Committee; and chair, Hunton Andrews Kurth LLP Pro Bono Committee
  • J.D. degree, cum laude, University of Richmond School of Law; B.A. degree in political science, University of North Carolina
  • Can be contacted at 804-788-8529 or [email protected]
Hillary Patterson

Hillary Patterson

Hunton Andrews Kurth LLP

  • Law Clerk* with Hunton Andrews Kurth LLP (*admitted in Virginia)
  • Practices areas include banking and finance, lending services, capital markets and securities, finance and restructuring, energy finance and securitization
  • Practice focuses on commercial lending, loan workouts and restructurings and business law
  • Represents borrowers and lenders in connection with revolving, bridge and term loan facilities, with an emphasis on the representation of public and portfolio company borrowers in both cash-flow and asset-based financings
  • Represents borrowers and lenders in connection with revolving, bridge and term loan facilities, with an emphasis on the representation of public and portfolio company borrowers in both cash flow and asset-based financings
  • Has spoken and written on topics of relevance to her practice
  • Member of the Virginia State Bar; Virginia Bar Association; Richmond Bar Association; Leadership Metro Richmond, Class of 2018; and member, Screening Committee, Mid-Atlantic Innocence Project
  • J.D. degree, magna cum laude, executive board member, moot court board, McNeill Law Society, University of Richmond School of Law; B.A. degree in economics, cum laude, Wake Forest University
  • Can be contacted at 804-787-8133 or [email protected]
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Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

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Product ID: 409096
Published 2021
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