Refinancing and financial distress – covenants, waivers and lender negotiations

This practical webinar provides a practical guide to advising lenders and borrowers when a financing begins to show signs of stress or enters a pre-distressed phase, covering the development of issues from early warning signs and covenant pressure through to waivers, amendments, standstill arrangements, refinancing and potential enforcement. The webinar covers understanding the wider commercial context, identifying key legal and documentary issues, supporting negotiations effectively and protecting the client’s position throughout.

Topics covered include:

Recognising Early Warning Signs of Distress

• Financial and operational indicators
• Covenant headroom, missed payments and funding pressures
• Refinancing difficulties and delayed reporting

Understanding Finance Documents & Capital Structure

• Facility agreements, security and guarantees
• Intercreditor arrangements, rights and priorities

Financial Covenant Stress & Breaches

• Covenant testing and key terminology
• Anticipated breaches, defaults and events of default
• Cure rights, equity cures and recalculation

Responding to Potential or Actual Defaults

• Notifications, information gathering and escalation
• Default interest, drawstops and representations
• Documenting the position appropriately

Waivers, Amendments & Reservations of Rights

• Scope and conditions of waivers
• Fees, repeated requests and avoiding inadvertent waiver
• Reservation-of-rights letters

Standstill Arrangements

• Purpose and key provisions
• Milestones, lender rights and enforcement restrictions

Refinancing & Restructuring Strategies

• Extensions, covenant resets and new money
• Equity injections, debt rescheduling and asset sales
• Assessing whether proposals are credible and deliverable

Negotiation Strategy: Lender & Borrower Perspectives

• Objectives, leverage and commercial pressures
• Balancing flexibility, control, protection and value

Strengthening & Protecting the Lender’s Position

• Enhanced reporting, cash controls and additional security
• Revised covenants, reviews, valuations and adviser appointments
• Restructuring milestones and restrictions on disposals or distributions