March 4, 2019 - The LSTA is delighted to announce that the LSTA’s new form of Agreement Among Lenders is now published in final form. This form AAL is intended to be appropriate for a synthetic first lien/second lien unitranche financing. By way of background, in unitranche financings, different tranches of debt are combined into a single tranche of debt that is extended to the borrower under one credit agreement. The borrower pays one blended interest rate to the lenders, and the lenders agree to create first out and last out tranches in a separate Agreement Among Lenders. Unitranche structures are complicated, and there are, and will continue to be, a variety of structures in the market. A single form is not able to capture all of these different structures, so for purposes of this project, it was decided that this form would be designed for a middle of the road, synthetic first lien/second lien financing. Our intention is for this form to serve as a helpful drafting resource and we have included different drafting options along with explanatory footnotes. Publication of this form represents an exciting new step for the LSTA in that it is the first document offering intended for middle market lending.

The LSTA will continue to look for opportunities to develop market standards and forms for this important space. For more information on the new form or to send any suggestions of potential projects, please contact Bridget Marsh or Tess Virmani.

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