ACT Guide to Investment Grade Agreements LMA.pdf - The ACT...

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Produced byThe ACT Borrower’s Guide to the LMA’s Investment Grade Agreements
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/ The ACT Borrower’s GuideThe ACT Borrower’s Guide to the LMA’s Investment Grade Agreementsproduced by Slaughter and May5thEdition 1 September 2017This guide has been produced for the ACT by Slaughter and May to provide assistance to corporate treasurers reviewing draft facility agreements based on the LMA documentation for investment grade borrowers.
The ACT Borrower’s Guide /
/ The ACT Borrower’s GuideIntroduction 1Part I: Overview 31. The Investment Grade Agreements 32. How to approach the Investment Grade Agreements 33. The Investment Grade suite 64. The LMA library 6Part II: Recent Developments 91. Introduction 92. Extension options and accordion facilities 103. Negative benchmarks 114. Benchmarks 125. Sanctions 166. Anti‑corruption laws 187. FATCA 208. Lease accounting 219. Article 55 of the BRRD 2310. Brexit 25Part III: Commentary on the Investment Grade Agreements 29Section 1: Interpretation 30Clause 1: Definitions and Interpretation30Section 2: The Facilities 47Clause 2: The Facilities47Clause 3: Purpose48Clause 4: Conditions of Utilisation48Section 3: Utilisation 51Clause 5: Utilisation51Clause 6: Optional Currencies51Section 4: Repayment, prepayment and cancellation 53Clause 7: Repayment53Clause 8: Prepayment and Cancellation53Section 5: Costs of utilisation 57Clause 9: Interest57Clause 10: Interest Periods57
The ACT Borrower’s Guide / Changes to the Calculation of Interest58Clause 12: Fees63Section 6: Additional payment obligations 64Clause 13: Tax Gross Up and Indemnities64Clause 14: Increased Costs73Clause 15: Other Indemnities78Clause 16: Mitigation by the Lenders79Clause 17: Costs and Expenses80Section 7: Guarantee 81Clause 18: Guarantee and Indemnity81Section 8: Representations, Undertakings and Events of Default 82Clause 19: Representations84Clause 20: Information Undertakings90Clause 21: Financial Covenants94Clause 22: General Undertakings99Clause 23: Events of Default104Section 9: Changes to the Parties 111Clause 24: Changes to the Lenders111Clause 25: Changes to the Obligors117Section 10: The Finance Parties 118Clause 26: The Role of the Agent and the Arranger [and the Reference Banks]118Clause 27: Conduct of Business by the Finance Parties120Clause 28: Sharing among the Finance Parties121Section 11: Administration 122Clause 29: Payment Mechanics122Clause 30: Set‑Off123Clause 31: Notices124Clause 32: Calculations and Certificates124Clause 33: Partial Invalidity124Clause 34: Remedies and Waivers124Clause 35: Amendments and Waivers124Clause 36: Confidential Information126Clause 37: Confidentiality of Funding Rates and Reference Bank Quotations129Clause 38: Counterparts129
/ The ACT Borrower’s GuideSection 12: Governing Law and Enforcement 130Clause 39: Governing Law130Clause 40: Enforcement130Schedules 132Part IV: Commentary on the Lehman provisions 1351. Introduction 1352. Defaulting Lenders 1353. Impaired Agent 1364. Issuing Banks 1365. Alternative Market Disruption provisions 136Glossary 139About the Association of Corporate Treasurers 140ACT contacts 140About Slaughter and May 141Slaughter and May contacts 141
The ACT Borrower’s Guide /

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