The Loan Market Association has recently updated its suite of super senior loan and intercreditor documentation. The update seeks to take account of changes made to the LMA’s leveraged documentation during November 2016.
Those November 2016 changes covered several areas, including the introduction of a mechanic for the establishment of incremental loan facilities. They also enabled lenders to transfer to entities on a pre-approved list without having to obtain the parent’s consent. A new undertaking and condition precedent were introduced dealing with the “People with significant control” regime. Other changes enabled lenders to refresh their KYC upon a change of status or ownership composition in an obligor’s holding company which is not itself an obligor. The list of amendments requiring all lender consent was also expanded to include, among other things, changes to the provisions dealing with illegality and the resignation or accession of obligors.
The super senior documentation is intended to be used in leveraged acquisition finance transactions in much the same way as the LMA’s leveraged documentation. The documentation provides for a super senior revolving facility with senior secured notes. A separate option also deals with the introduction of high yield notes. These are useful starting-points for borrowers seeking access to more flexible financing for ordinary corporate activities.
Jonathan Porteous
Matthew Padian