The ACT Borrower's Guide to the LMA Facilities Agreement for Leveraged Transactions

The purpose of this guide is to provide an overview of the Leveraged Facilities Agreement and to highlight certain key borrower issues arising from it of which corporate treasurers should be aware. The guide has been produced by the ACT with assistance and sponsorship from Slaughter and May (www.slaughterandmay.com)

Whilst the Association of Corporate Treasurers (ACT) is closely involved in the settlement of the terms of the LMA facility agreements for investment grade borrowers (the "Investment Grade Documents"), the LMA did not seek the views or comments of the ACT on the terms of the Leveraged Facilities Agreement. The Leveraged Facilities Agreement is therefore a more lender-friendly document than the Investment Grade Documents and, importantly, is not endorsed by the ACT.

The general format of the Leveraged Facilities Agreement will, however, be familiar to users of the Investment Grade Documents and certain of the "boilerplate" provisions are substantially the same. A number of these common provisions are explained in detail from a Borrower perspective in our existing ACT Guide to the LMA Documentation for Borrowers (the "ACT Borrower’s Guide to the Investment Grade Documents", available at www.treasurers.org/loandocumentation/investmentgrade). Relevant sections are crossreferenced in the text of this guide.

This guide is in two parts:

• Part I contains an overview of the Leveraged Facilities Agreement. It also contains a summary of certain key points for negotiation (which are explored in more detail in Part II).
• Part II is a commentary on certain key provisions of the Leveraged Facilities Agreement (and an explanation of some key omissions). It provides background to the most commonly negotiated aspects of the document and includes a series of "Borrower Notes" highlighting particular issues which Borrowers may wish to discuss with Lenders.

About Slaughter and May
Slaughter and May is a leading international law firm, which is well known as an advisor to corporate treasurers in their dealings in the domestic and international banking markets. The guide is published by the ACT and Slaughter and May and was sponsored and produced by Slaughter and May (www.slaughterandmay.com) for the ACT.