The financial covenants are an integral, and increasingly important part of the loan agreement. They require the input of both the financial specialists and the lawyers to ensure that they are workable; not too one sided; and properly integrated with the other provisions of the loan agreement. All too often, this does not happen, and as a result it is common to see financial ratios which are so vague as to be unworkable or which are very onesided in their operation – either very favourable to the borrower or to the lenders. They are sometimes simply wrong – with things being deducted which ought to be added and vice versa
This course is designed to address that. It explains financial covenants in loan agreements for the benefit of those who do not have a background in financial analysis. It aims to demystify the financial ratios and give you confidence to approach these provisions and to appreciate some of the important commercial issues which they give rise to. The course starts with an overview of the ratios, and then takes you step by step through the various concepts used in them, starting from first principles and with plenty of simple examples and exercises, so as to provide a thorough understanding of the common elements of each of the financial covenants discussed and of the commercial impact of these provisions.
The course is supplemented by a module covering some key topics in the loan agreement (such as the concepts of “Default”, cross default, Margin ratchets, and material adverse change) and explaining the relationship between those provisions and the financial covenants, so that during the course you will be able to understand the commercial implications of the financial covenants in the context of the loan agreement as a whole
No prior knowledge of company accounts is required and by studying online, delegates can get to grips with the subject at their own pace, whatever their level of prior knowledge.
Modules
