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What You Will Learn
- Advantages of a participation to the lead bank and participant bank
- Risks to the participant
- Lack of information
- Lack of involvement in negotiations
- Dependency upon lead
- Waivers
- Financial instability/insolvency of lead
- Set-off by borrower
- Failure to perfect
- Conflicts of interest
- Due diligence by the participant and access to information
- Disclosure of participation to borrower
- Concentrations and other regulatory aspects of participations
- Loan agreement provisions related to participations
- Duties owed by lead to participant
- Rights to loan collateral and guaranties
- Loan administration issues
- Loan payments and other functions
- Consent to amendments
- Restrictions on transfer
- Loan purchase options
- Reimbursement and indemnification obligations
- Subparticipations
- Set-off by participant
- Understanding the participation agreement
- The participant's checklist
- The participation in workout