Mezzanine Financing for Middle Market Deals: Significant Developments
Overview:
In this CLE course our panel of key thought leaders and practitioners, assembled by The Knowledge Group, will discuss the fundamentals of Mezzanine Financing and the most current and significant issues surrounding this topic. This LIVE webcast aims to help lending and commercial financing counsel avoid common pitfalls and risk concerning Mezzanine Financing for Middle Market Deals.
Key topics include:
- Mezzanine Financing: Review
- Alternative Financing
- Structuring Mezzanine Financing
- Shareholder Liquidity and Inter-generational Transfer
- Advantages and Dis-advantages of Mezzanine Financing
- Risks and Pitfalls of Mezzanine Financing
- Market Trends and Regulatory Updates
Agenda:
SEGMENT 1:
Shlomo Troodler, Partner
Blank Rome LLP
- What is “Mezzanine Financing”? When would a deal typically involve “Mezzanine Financing”? Why use Mezzanine Financing? [Idea would be to identify terminology is not always consistent between Mezzanine financing, second lien, tranche B, Junior debt, etc.; focus on private equity platform acquisitions/leveraged buy-outs, add-on acquisitions, dividend recapitalizations, fundless sponsor transactions, growth capital, etc. and ability to get additional capital without high cost of equity capital]
- Documentation and Structure of Mezzanine Financing [Discussion of using the same or different forms as Senior Lenders; matching of covenants, reps, warranties, defaults, etc.; how “Unitranche” facilities relate to Mezzanine; rights as investor if equity piece]
- Relationships of Mezzanine Lender with Other Lenders [High level view of capital structure and intercreditor issues; relates to Unitranche as well]
- Importance of Intercreditor Issues—Typical Provisions and A Few Specific Hot-Button Areas [Blockage (and what should not be blocked), standstill (and when should the standstill not apply), amendment rights, purchase option, rights as an unsecured creditor and cross-default/cross-acceleration]
- Current Market Trends [decrease in rates and fees, less equity available in form of warrants, untiranche, diligence periods, larger funds investing in middle market opportunities, etc.]
- Taking of a Security Interest [recent trend to require Mezzanine debt to be unsecured; value of taking security interest]
- Additional Issues to Watch Out For [AHYDO, covenants on cushions]
- Issues to Take Into Consideration in Structuring a Mezzanine Transaction [who is your borrower? What is the exit strategy? Projected ROI; capital structure; equity component]
SEGMENT 2:
Grant Puleo, Partner
Duane Morris LLP
- Require the Borrower to Opt-In to Article 8
- Obtain UCC Insurance and a Land Title Policy Mezzanine Financing Endorsement
- Negotiate Subordination/Intercreditor Agreement With Senior Lender
- Carefully Review Senior Loan Documents
- Tailor Borrower's Organizational Documents
- Draft Pledge and Security Agreement to Comply With UCC Requirements
- Make Sure All Mezzanine Loan Documents are Consistent
- Require Borrower's Counsel to Provide Opinion Letter
- Establish Comprehensive Checklist for Due Diligence Items
- Follow-up on Items That Need to be Obtained After the Closing
Who Should Attend:
- Middle-Market Dealers
- Lending and Commercial Finance Counsel
- Finance Advisers
- Finance Analysts
- Financial Industry Analysts
- Other Related/Interested Professionals and Organizations
Grant Puleo focuses his practice on a wide variety of real estate, finance and business transactions. He has extensive experience …
Shlomo Troodler, a partner in Blank Rome’s Finance, Restructuring and Bankruptcy group, concentrates his practice in a diverse range of …
Course Level:
Intermediate
Advance Preparation:
Print and review course materials
Method of Presentation:
On-demand Webcast (CLE)
Prerequisite:
NONE
Course Code:
145005
NASBA Field of Study:
Specialized Knowledge and Applications
NY Category of CLE Credit:
Areas of Professional Practice
Total Credits:
2.0 CLE
2.0 CPE (Not eligible for QAS (On-demand) CPE credits)
Login Instructions:
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SPEAKERS' FIRMS:
About Duane Morris LLP
Duane Morris LLP, a law firm with more than 700 attorneys in offices across the United States and internationally, is asked by a broad array of clients to provide innovative solutions to today’s legal and business challenges. Throughout its more than 100-year history, Duane Morris has fostered a collegial culture, where lawyers work with each other to better serve their clients. Lawyers who are leaders in a range of legal disciplines and have diverse backgrounds join Duane Morris in order to use the latest technology, professional support staff and other resources in pursuit of clients’ goals.
Website: https://www.duanemorris.com/
About Blank Rome LLP
Blank Rome LLP is an AmLaw 100 firm with 500 attorneys in twelve offices serving clients across the globe. Clients include businesses and organizations ranging from Fortune 500 companies to start-up entities. Blank Rome attorneys counsel their clients in all aspects of their businesses including financial services; mergers & acquisitions and private equity; public companies and capital formation; venture capital; bankruptcy and financial restructuring; health law; real estate; commercial and corporate litigation; employment benefits and labor; government relations; intellectual property; business tax; maritime, international trade and procurement; matrimonial; product liability; trusts and estates; and white collar, internal and government investigations. Additionally, Blank Rome attorneys represent pro bono clients in a wide variety of cases and matters.
Website: https://www.blankrome.com/