Prepare For Additional Revolver Draws During Current Crisis

In the face of these unprecedented and uncertain days of COVID-19, financially stressed borrowers are expected to take every measure available to them to keep their businesses afloat. For borrowers with revolving credit lines, this has included drawing down unused availability to ensure immediate, and sometimes future, access to needed liquidity. In ordinary circumstances, a revolver provides a borrower flexibility to address changing cash flow needs on a cyclical or seasonal basis. Today, an untapped revolver may be a lifeline for a business struggling with the loss of cash flow. Continue reading “Prepare For Additional Revolver Draws During Current Crisis”

Unitranche Facilities – Continued Growth in an Uncertain Market: Part III

In two recent posts I discussed (i) the structure of unitranche facilities and their growing acceptance in the market and (ii) the uncertainty inherent in these facilities because they have not been tested by a troubled economic environment. Below I address certain of the substantive differences between common terms contained in agreements among lenders (or AALs) found in unitranche transactions and more traditional intercreditor agreements between first lien and second lien lenders. Note that because the unitranche market continues to develop, the standardization found in intercreditor agreements does not yet exist for AALs and many terms remain negotiable. Continue reading “Unitranche Facilities – Continued Growth in an Uncertain Market: Part III”