The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:
This Practice Note is intended as an introduction to facilities typically contained in a leveraged senior facilities agreement (SFA) and covers:
the main characteristics of each type of senior facility
typical senior lenders
documenting the terms of the senior facilities, and
the security and intercreditor position of senior facilities.
For an introductory guide to acquisition and leveraged finance, see Practice Note: Acquisition finance—introductory guide.
For more detail on typical terms applicable to senior facilities, see Practice Note: Acquisition finance—facilities agreement.
An explanation of many of the terms used in this Practice Note can be found in the Glossary of acquisition finance terms and jargon.
The senior facilities that may be provided to the group can broadly be divided into three types:
the main term facilities, used for the acquisition (or refinancing or recapitalisation, as applicable)
other term facilities eg incremental facilities, capex and/or further acquisition facilities, and
working capital facility in the form of a revolving credit facility (RCF)
There are a number of different possible transaction structures—these are explained in more detail in Practice Notes: Acquisition finance—intercreditor agreement—parties and structures and Structure of a buy-out.
In summary, a transaction involving senior facilities will typically comprise one of the following structures:
senior term facilities and a senior RCF—these will normally be documented in the same facilities agreement and can
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