How To Cut Risk Of Dealing With A Defaulting Lender

Law360 (October 9, 2008, 12:00 AM EDT) -- In the wake of recent bankruptcy filings by several prominent financial institutions, there’s a growing interest in changing standard credit documentation to address the risks of defaulting lenders and nonperforming administrative agents.

Here are credit agreement provisions that financial institutions, acting as swingline lenders and letter of credit issuers, can require to protect themselves against the risk of a defaulting lender.

Also covered are recommendations on dealing with the risk of an administrative agent becoming a defaulting lender or not complying with its credit agreement obligations....
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