Max Millington
Max’s practice involves advising financial institutions, private credit funds, private equity sponsors and corporate borrowers on (primarily mid-market) leveraged and corporate finance products, financial restructurings and stressed/distressed positions.
Within that universe, he has a particular focus on advising in relation to private credit: direct lending, unitranche, first-out/super-senior, junior debt (mezzanine, second lien, holdco PIK) and rescue capital.
Practice Area
Panel
- Contributing Author
Qualified Year
- 2007
Experience
- Osborne Clarke LLP (2017 - 2022)
- Freshfields Bruckhaus Deringer LLP (2007 - 2017)
- Hammonds LLP (2005 - 2007)
Membership
- Turnaround Management Association
Qualifications
- Legal Practice Course (2005)
- Graduate Diploma in Law (2004)
- B.Sc. (Hons) Accounting and French (2002)
Education
- BPP (2003 – 2005)
- University of Southampton (1998 - 2002)
2 Contributions by Max Millington
PRACTICE NOTES
Leveraged Finance Incremental (‘Accordion’) Facilities and Incremental Equivalent Debt: Market Usage, LMA Mechanics, Yield Caps, Security and Drafting Issues
What are incremental facilities?
An incremental facility is a provision in a credit agreement that, once certain pre-agreed conditions are met, gives a borrower the latitude to take on further, or enlarged, debt commitments. Those additional commitments will usually and ordinarily enjoy guarantees and security on the same footing as the existing facilities. Such arrangements are commonly nicknamed “accordion” facilities because the overall commitments under the credit agreement expand when incremental debt is raised.
Typical deal structure—where/when are they used
Flexibility for incremental debt is a familiar element of sponsor-backed transactions in both the large-cap and mid-cap space. The Loan Market Association’s leveraged finance form of loan agreement (the LMA Credit Document) now provides optional drafting to include this feature within the form. In mid-cap deals, the expectation is generally confined to pari passu ranking senior term incremental facilities, which also sit alongside the incumbent senior term lines. An exception is seen in certain unitranche super-senior mid-cap structures, which also permit additional super-senior term debt. In large-cap structures, incremental facilities are often put in place to introduce junior debt, or pari passu debt that does not constitute a “facility” under the loan agreement, as well as revolving facilities.
Key features...
Banking & Finance
PRACTICE NOTES
Private Equity Buy-out Structures: SPVs, Funding, Subordination, Tax, Legal and Enforcement Issues (UK)
Factors influencing structure
How a contemplated buy-out should be shaped is usually addressed early in the timetable and is typically set out in a document produced by the sponsor’s tax advisers, commonly referred to as a tax structure paper or memorandum. As the transaction proceeds, the structure often develops as fresh information emerges and professional advice is finalised. In this setting, ‘structure’ generally encompasses:
the corporate framework put in place to effect the acquisition;
the injection of funds into that framework and their movement within the group so they are where they must be at completion; and
the steps required to implement the acquisition, the sponsor’s investment and any reinvestment by management
These components are naturally interconnected. The term can also at times be used more broadly to cover determining the capital structure, ie the sources of the acquisition funds and their respective amounts. For information on the different ways a buy-out can be financed, see Practice Note: Sources of finance...
Banking & Finance
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