Until the global economy begins to recover from COVID, Delaware Trust anticipates an increase in corporate defaults, triggering the resignation or removal of administrative agents. This will undoubtedly disrupt the orderly administration of credit facilities and increase the demand for successor loan administrative agents. As a result, choosing a qualified successor loan administrative agent will become paramount to maintain continuous administration of these loans.
Adam Berman, managing director, and Sean Foronjy, head of loan agency, share their views on key considerations both lenders and borrowers should look for when choosing a successor loan administrative agent.
Consideration #1: Independent and conflict-free agent
The market is full of options when selecting a successor administrative agent. The key is to choose a non-lending agent that is truly conflict-free, whose primary purpose is to move the transaction forward with no stake in the deal.
Consideration #2: Experience matters
Professionals with a proven track record are critical to success. It’s important that your successor administrative agent not only understands both the buy and sell side but also has workout and restructuring experience.
Consideration #3: Global capabilities
Operating in today’s complex, global market requires many restructuring deals to work across jurisdictions. Relying on a successor administrative agent with an experienced team or partnership that delivers seamless service across the United States, Europe, and APAC can be beneficial.
Consideration #4: Service
Today’s transactions require accelerated timelines to approve KYC and close bank loan trades promptly. It’s essential to find a successor agent that moves quickly.
Consideration #5: Custom solutions
Every restructuring deal is different. A successor administrative agent that can assess the situation, understand the deal’s nuances, and respond with a pragmatic approach will yield much better results than cookie-cutter solutions.
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Delaware Trust, a leading provider of corporate trust and agency services, is a wholly-owned subsidiary of CSC and a fully regulated institution. Our legal, banking and financial professionals are well-versed in all aspects of loan agency as well as bankruptcy and restructuring. We can step into each successor appointment with speed and efficiency, ensuring a seamless transfer with no loan disruptions. We pride ourselves in offering dedicated, personalized service to every participant in the loan syndicate, ensuring proactive, responsive, and swift actions regarding assignments, payments, notices, rate fixings, KYC, and covenant compliance.