Yvett Talas
Yvett advises on a wide range of banking transactions, including corporate acquisitions, debt refinancing and restructuring, and real estate investment and development finance.
1 Contributions by Yvett Talas
PRACTICE NOTES
Loan-to-Value Covenants in Secured Lending: Key Terms, Valuations, Declaring Defaults, Borrower Defences, Cure/Workout Options and Market Conditions
This Practice Note looks at:
the principal features of loan to value (LTV) covenants in secured lending transactions
possible issues with calling an event of default arising from a LTV covenant breach
potential challenges to an event of default based on a LTV covenant breach
remedying a LTV covenant breach
the impact of the economy on LTV covenant breaches
LTV covenants are a vital element of risk management in secured lending. An LTV covenant is a common financial covenant that requires the outstanding principal of a loan, expressed as a percentage of the value of the security charged in favour of a lender, to stay below a specified threshold for the life of the loan. This gives lenders a means to monitor and protect the strength of their security over time.
For borrowers, grasping and negotiating these covenants is key to achieving favourable loan terms and steering clear of the pitfalls that can arise from a breach. Although a lender relying on an LTV breach to declare an event of default has generally been regarded as relatively uncontroversial, there are a number of issues to consider...
Restructuring & Insolvency
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