Law360, New York ( May 7, 2013, 2:02 PM EDT) -- Over the last few years, provisions in credit agreements permitting the borrower's equity sponsor and other affiliates (typically referred to as "affiliated lenders") to purchase term loans made thereunder[1] and allowing the borrower to "repurchase"[2] such term loans on a non-pro rata basis, have become common. However, many of the provisions governing such purchases that have become "market standard" do not adequately protect the non-affiliated lenders' interests in a bankruptcy of the borrower. This article explores such provisions, how they fail to protect non-affiliated lenders and how they could be properly drafted in order to address non-affiliated lenders' concerns....
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