Shearman & Sterling LLP
Issue link: https://digital.shearman.com/i/1494420
Priming Transactions – Initial Considerations 9 In order to evaluate priming risk/opportunities, it is necessary to understand the documentary framework applicable to a debtor's existing indebtedness: • Scope within existing documentation to incur priming debt and sources of value leakage; • Typical consent thresholds/mechanics under key finance documents; • Techniques used to implement dropdown and uptiering priming transactions, including by reference to recent cases. Directors will need to give careful consideration to their duties in advance of pursuing any priming transaction. If a duty to have regard to the interests of creditors is engaged, then a consideration of alternatives such as the likelihood of refinancing/raising new money from third party sources without affecting existing creditors' rights may be important. Liability Management and Refinancing Solutions in Europe