Borrowers and lenders needs satisfied

Straightforward communications successfully restructure complex loan facility debts.

Challenge

The team acted for a syndicate of 14 separate financial institutions (banks, multilateral lending
organisations and infrastructure investment funds) on the debt restructuring of loan facilities made
available to an institutional borrower based in Central Europe. Each lender had one or more bilateral
loan agreements in place with the borrower, and an intercreditor agreement governed the relationship
among the lenders.
The key challenges were:

  • negotiating and drafting restructuring arrangements that were acceptable to the borrower and
    all of the lenders which required accommodating 15 sets of comments where the positions
    taken were often not consistent;
  • dealing with parties in eight different jurisdictions (and, in some cases, their legal advisers in
    those jurisdictions); and
  • managing a complicated conditions precedent and execution process.

Inspiration

Clear communication was paramount. We used regular update conference calls to discuss outstanding issues and comments on new drafts of the restructuring documentation. This allowed the many differences of opinion (particularly among the lenders) to be resolved directly in the calls as opposed to requiring multiple rounds of correspondence.

We also made sure that all lenders were copied on all relevant correspondence and received documents simultaneously so that each lender could feel comfortable that it was fully up-to-date with developments and that there were no conversations behind the scenes from which it was excluded. This is often an area of sensitivity in intercreditor situations.

Result

The restructuring arrangements were successfully implemented to the satisfaction of the borrower and all lenders. The borrower continues to service the outstanding debt and has actually been making payments ahead of schedule.

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