Parties and Players Flashcards
(137 cards)
1
Q
Accredited Investor
A
This refers to people and entities that are permitted to buy Securities in a Private Placement. The term covers virtually all types of institutions that are participants in the private placement market, and also includes people who are either rich or sophisticated.
2
Q
Administrator
A
A licensed UK Insolvency practitioner (usually an accountant) who is appointed by the court, the company’s directors or by certain qualifying Secured Parties for the purposes of an Administration.
3
Q
Affiliate
A
Defined slightly differently in different types of agreements and jurisdictions, but generally refers to a subsidiary, corporation, partnership or other person controlling, controlled by or under common control with another entity.
4
Q
Agent
A
A generic term that is usually used to describe the Facility Agent, but may also be a reference to any of the following: Security Agent, Documentation Agent, Syndication Agent, Paying Agent, Transfer Agent or Registrar.
5
Q
Angel Investor
A
An investor (usually an affluent individual as opposed to a corporation) that provides capital for a business start-up, usually in exchange for Preference Shares, convertible debt or Equity ownership.
6
Q
Arranger
A
The bank or financial institution that “arranges” (alone or with other co-Arrangers) a Facility by negotiating original terms with the Borrower and Syndicating the facility to a larger group of Lenders. An Arranger generally has no ongoing obligations under a Facility Agreement after the Closing Date. Also used to describe the bank taking the lead on arranging an EMTN or GMTN Programme.
7
Q
Audit Committee
A
A committee of the board of directors of a company that oversees a company’s audit, control and financial reporting functions.
8
Q
Authorised Person
A
A person who is authorised for the purposes of FSMA to carry out a regulated activity.
9
Q
B&D / Billing & Delivery
A
The lead Initial Purchaser, Manager or Underwriter that is responsible for collecting money from investors at Pricing and delivering the money to the Issuer (and collecting the fees on behalf of the Initial Purchasers, Managers or Underwriters) at Closing. The B&D Initial Purchaser, Manager or Underwriter will also help with the process of clearing the Securities through the relevant Clearing System and will have to sign some certificates from the Closing Memorandum.
10
Q
Beneficial Owner
A
If you have the power to vote or dispose of a particular Security, either individually or as part of a group acting in concert, then you are probably the Beneficial Owner of that Security.
11
Q
Bidco
A
The name typically given to the SPV established by a Sponsor as the acquiring entity in a Leveraged Buyout or by a corporation in a takeover. Usually Bidco will be the main Borrower in acquisition-related Facilities.
12
Q
Bondholder
A
A holder of a Bond.
13
Q
Bookrunner
A
In the loan world, the Arranger who runs the Book during Syndication and determines what portion of a Facility will be allocated to each potential Lender. The Bookrunner should not be confused with the Syndication Agent for a particular Facility. Similarly, the Bookrunner in a Securities offering manages the marketing efforts and determines what portion of the offering will be allocated to each potential investor. See Lead Manager.
14
Q
Borrower
A
A company that borrows under a Facility Agreement
15
Q
Broker-Dealers
A
Entities that have to register with the SEC, the FCA or another applicable regulatory authority because they trade Securities for themselves or on behalf of others.
16
Q
Chargee
A
Another name for a Secured Party
17
Q
Chargor
A
A company or person (usually a Borrower or Guarantor) who grants a Charge or other Security Interest in favour of the applicable Secured Parties pursuant to a Security Agreement. Also known as a Pledgor.
18
Q
Class
A
Lenders holding a particular “class” or Tranche of Term Loans or Revolving Loans.
19
Q
Co-Comm
A
Slang for a Coordinating Committee, usually in a restructuring or workout process.
20
Q
Co-Lead Manager
A
A Manager who participates in some of the obligations of the Lead Manager, but who is not a Bookrunner of the Securities.
21
Q
Co-Manager
A
A Manager who is not a Bookrunner of the Securities and does not typically have any principal obligations in the documentation of the issue but is included in the Syndicate because of its ability to place the Securities.
22
Q
Common Depository
A
For notes issued in CGN form, the depositary bank is called a Common Depositary and is often the same entity as the Fiscal Agent or Principal Paying Agent.
23
Q
Common Safekeeper
A
If notes are issued in NGN form, the depositary bank is called the Common Safekeeper who holds the NGN in safekeeping and is usually one of the ICSDs or the common service provider. Also known as the CSK.
24
Q
Concert Party
A
A person or group of persons acting together to achieve a common or shared goal. See Acting in Concert.
25
Coordinating Committee
Used in restructurings, in particular where the Syndicate is large. The Coordinating Committee acts as the interface between the Borrower and the Lenders, looking to agree the terms of a restructuring. Members typically include the largest debt holders in the Syndicate. Their leader is known as the Coordinator. The Coordinating Committee can’t bind the rest of the Lenders. Also known as a Creditors Committee or Steering Committee.
26
Coordinator
The lead institution on the Coordinating Committee.
27
Creditors Committee
In the restructuring context, see Coordinating Committee. A quite separate Creditors Committee may also be established in formal Insolvency proceedings, as in the case of English Administration or liquidation proceedings. Here the committee is intended to be representative of the general body of creditors, with consultation and (in liquidation) certain approval rights in respect of various matters.
28
CREST Shareholder
A shareholder holding his/her shares or Securities electronically within CREST, whose name appears on the company’s shareholder register as the legal owner of those Securities, with entitlement to all rights and benefits attached.
29
CSK
Common Safekeeper.
30
Custodian
A financial institution holding Securities in safekeeping for a client either as part of an issue of Securities or generally.
31
Dealer
An investment bank agreeing to act for an Issuer under a MTN Programme in respect of the Issuer’s issues of Notes but without any upfront underwriting or subscription commitment.
32
Defaulting Lender
The name used to describe a Lender that fails to fund, rescinds the Facility Agreement or related documentation, or becomes subject to Insolvency proceedings. The consequences of becoming a Defaulting Lender vary between Facility Agreements but can include loss of entitlement to any Commitment Fee, inability to vote on amendments and Waivers and/or being caught by a Yank-a-Bank.
33
Direct Participant
Each Bondholder who is shown in the records of the Clearing Systems as a holder of Securities.
34
Distressed Debt Fund
An investor that only looks to purchase Distressed Debt.
35
Documentation Agent
A title often granted to a Lender who takes a large portion of a loan commitment in the Syndication process. The position generally does not require any actions or entail any responsibilities (or warrant additional fees!). Essentially, it is a means for a Lender to get its name on the cover of a Facility Agreement and receive League Table Credit. Not overly common in Europe.
36
Facility Agent
The bank that serves as the principal Agent administering the Facilities in the Facility Agreement. The Facility Agent is responsible for processing Interest payments to Lenders, posting notices delivered by the Borrower and acting as the primary representative of the Lenders under a Facility Agreement in dealings with the Borrower. The Facility Agent is often also the same entity as the Security Agent, but wearing another hat.
37
Fallen Angel
Can refer to (i) the Issuer of a Bond that was once Investment Grade but has since been reduced to Junk Bond status or (ii) a stock that has fallen substantially from its all-time highs.
38
Finance Subsidiary
A company (known colloquially as “Finco”) primarily used by a parent company to raise money, usually in the context of a Notes offering. The proceeds of the Notes are advanced to the parent or to the parent’s Operating Subsidiaries.
39
Financial Buyer
Generally, a Sponsor that is acquiring a company as an investment rather than to achieve strategic Synergies. Compare Strategic Buyer.
40
Fiscal Agent
A bank appointed by the Issuer and any Guarantor to carry out payments and other administrative duties in relation to the Securities. A Fiscal Agent is used where there is no Trustee and the role is identical to that performed by a Principal Paying Agent. The Fiscal Agent is the agent of the Issuer and owes no fiduciary duties to the Bondholders in the way that a Trustee would.
41
Foreign Private Issuers
Certain Issuers of Securities in the United States (other than a foreign government) organised in a jurisdiction outside of the United States. Foreign Private Issuers are treated differently than US domestic Issuers in several important respects, including the types of Financial Statements they are required to file with the SEC.
42
FPI
Foreign Private Issuer
43
Fronting Bank
Usually a reference to a bank that “fronts” a Loan for other Lenders. This may be due to practical reasons (e.g., the real Lender was unable to complete KYC in time for Closing or that all of the Lenders would have been required to be present before a notary at Closing) or legal reasons (e.g., as a result of the French Banking Monopoly restrictions or Italian regulatory requirements). Whilst in most instances the Fronting Bank arrangements will be temporary and the Fronting Bank will transfer its position to the real Lender shortly after Closing, in some instances a Fronting Bank will remain in place for the entirety of the financing, such as in an IBLOR structure. The Fronting Bank may receive a fee for its role.
44
Fulcrum Creditors
In a restructuring, Creditors whose claims are neither completely In the Money nor completely Out of the Money, i.e., in a distribution of assets they would only get partially repaid.
45
Guarantor
Subsidiaries, parent entities or sister companies that Guarantee the debt incurred by the Issuer/Borrower. The Senior Secured Facilities and the Mezzanine Facility / Bridge Facilities will usually have the same Guarantors. Generally, at least in LBO financings, Facilities are Guaranteed by all Material Subsidiaries and any other subsidiaries needed to ensure compliance with any Guarantor Coverage Test.
46
Hedge Counterparties
The providers of the Hedges required by the Hedging Strategy Letter. The Hedge Counterparties will typically benefit from the same Collateral and Guarantees granted to the Lenders of the First Lien Facilities on a Pari Passu basis.
47
Holdco
Another name for Holding Company.
48
Holdco Guarantor
any parent entity of an Issuer/Borrower that acts as a Guarantor of the Borrower’s or Issuer’s debt.
49
Holding Company
A company that sits on top of (or “holds” the Equity of) the Subsidiary that is below it. This concept sometimes connotes a company that does nothing else (i.e., has no operations). Bidcos are often Holding Companies and financing documentation will often contain a Negative Covenant preventing Bidco and other Holding Companies from doing anything other than entering into the transaction documents and otherwise providing customary holding company services.
50
Impaired Agent
Similar to the Defaulting Lender concept but for Facility Agents (i.e., a Facility Agent that fails to fund, rescinds the Facility Agreement or related documentation or becomes subject to Insolvency proceedings). The concept has become more common in Facility Agreements since Lehman Brothers, among others, went bust, as it allows the Facility Agent to be replaced without its consent or signature required (thereby removing the practical problems seen when Borrowers and Lenders wanted to replace Lehman Brothers or others as Facility Agent) and allows the Borrower and Lenders to make payments other than through the Facility Agent (which you don’t want to do if it is in Insolvency).
51
Initial Purchasers
In a Rule 144A Offering and Regulation S offering, Initial Purchasers play essentially the same role that Underwriters play in a registered transaction. Rule 144A provides a resale exemption from the registration requirements of the US Securities Act, permitting the investment banks that initially purchase the Securities from the Issuer in a Section 4(a)(2) offering to resell to big institutions (known as QIBs) without being deemed to be Underwriters under Section 2(a)(11) of the US Securities Act. Since we can’t call them Underwriters, we call them Initial Purchasers.
52
Institutional Investor
An organisation engaged in investing its own assets and assets held for others, e.g., insurance companies and pension funds.
53
Instructing Group
A name given to the group of creditors entitled under an Intercreditor Agreement to give instructions to the Security Agent. The Instructing Group may vary from time to time depending on the classes of debt remaining in the structure.
54
Investment Company
Generally, a company whose main business is holding Securities of other companies purely for investment purposes. As defined in the US Investment Company Act, an Investment Company is (i) engaged primarily in the business of investing, reinvesting or trading in Securities (or holds itself out as being in that business); (ii) owns “investment Securities” which constitute more than 40% of the value of its assets on an unconsolidated basis (excluding US government Securities and cash items) and (iii) is not entitled to any exemption from registration. A typical example of an Investment Company is a mutual fund, which is an entity organised to accept money or assets from investors, pool those assets and invest the assets on behalf of the investors.
55
Issuer
The entity that sells (or “issues”) Securities to Bondholders.
56
Issuing Bank
The bank that issues a Letter of Credit or Bank Guarantee (often the Facility Agent but wearing a different hat) under a Revolving Facility on behalf of all of the Lenders under that Facility. If the Issuing Bank is required to make a payment under the Letter of Credit or Bank Guarantee, it is entitled to be indemnified by the Lenders such that the risk is shared on a Pro Rata basis. The Issuing Bank receives an issuing fee for issuing and administering the Letter of Credit or Bank Guarantee.
57
JLM
Joint Lead Managers.
58
Joint Lead Managers
Two or more Lead Managers acting jointly in respect of an issue of Bonds.
59
LBO Fund
Another name for a Sponsor.
60
Lead Arranger
In a transaction with more than one Arranger, the primary or original Arranger engaged by a Borrower or Sponsor in connection with structuring a particular financing. There can be multiple Lead Arrangers.
61
Lead Left
Another name for the Lead Manager.
62
Lead Manager
In the loan world, another name for the Lead Arranger. In Capital Markets, the Initial Purchaser, Manager or Underwriter designated by the Issuer as the Lead Manager will generally run the show for the Initial Purchasers, Managers or Underwriters, selecting counsel, actively participating in the drafting of the Offering Memorandum or Prospectus and serving as Bookrunner. The Lead Manager will have its name placed on the left of the top line of the list of Initial Purchasers, Managers or Underwriters on the cover of the Offering Memorandum or Prospectus and in any Tombstone Ad. Sometimes referred to as Lead Left. See also Representative.
63
Left-Side Arranger
Another name for a Lead Arranger whose name appears on the left side of all marketing materials relating to the Facilities with respect to which it is the Lead Arranger.
64
Lenders
The financial institutions party to a Facility Agreement that lend the money. Also known as Lenders of Record.
65
Leveraged Buyout Firm
Another name for a Sponsor.
66
Listed Company
The term given to any company whose shares or Securities are traded on a Regulated Market. For example, in the UK this would refer to a company admitted to the Official List and being subject to the Listing Rules.
67
LoR
Lender of Record
68
Luxco
A company incorporated in Luxembourg, often used in European Leveraged Buyouts for tax efficiency reasons, including Luxembourg’s extensive network of Double Taxation Treaties and favourable Withholding Tax rules (attributes shared by a number of other jurisdictions in Europe), and now increasingly for Security Interest efficiency reasons under Double Luxco Structures.
69
Majority Lenders
usually the Lenders holding more than 66.6% (not 50% as the name would suggest and as is common in the US and also in European Bridge Facilities) of the aggregate principal amount of outstanding loans and unfunded commitments under a Facility Agreement. Usually required for approval of amendments and Waivers under a Facility Agreement, although certain amendments may require Super Majority Lender approval or 100% approval. See also Class Voting, Structural Adjustment and Super Majority Voting.
70
Manager
Another name for an Underwriter or Initial Purchaser. Often used in English law governed Bond transactions.
71
Mandated Lead Arranger
Another name for an Arranger.
72
Material Company / Material Subsidiary
It may be agreed that it is not appropriate for Representations and Warranties, Covenants and Defaults to apply to all subsidiaries in a group. Hence the use of this concept where entities are only caught if they meet a certain threshold (often 5% or more of the group’s EBITDA, assets and/or turnover). Facility Agreements will also typically require all Material Companies to be Guarantors, particularly in Leveraged Buyouts. Sometimes referred to as a Significant Subsidiary
73
MLA
Mandated Lead Arranger.
74
Nomad
Shorthand for a Nominated Adviser.
75
Nominated Adviser
An adviser for companies listed on AIM that is approved by the London Stock Exchange. AIM companies must retain a Nominated Adviser at all times. Also known as a Nomad.
76
Obligor
The collective name for Borrowers and Guarantors.
77
Obligor's Agent
The Obligors typically appoint a spokesperson for them, e.g., to agree to Amendments and Waivers on their behalf and to enter into all communications with the Facility Agent. That is the Obligors’ Agent.
78
OEIC
Open-Ended Investment Company.
79
Opco
Shorthand for Operating Company.
80
Open-Ended Investment Company
A company or fund that is structured to invest in other companies with the ability to adjust its fund size according to investor demand to buy or sell its shares. Broadly speaking, it is a collective investment scheme that acquires investments such as shares, stocks, Gilts, Bonds and cash with the aim of spreading investment risk and giving its investors (who hold the shares in the OEIC) the benefit of the results of the OEIC’s management of those investments. The price of the OEIC’s shares are based largely on the underlying assets of the fund.
81
Operating Company
Another name for an Operating Subsidiary.
82
Operating Subsidiary
A subsidiary of a Holding Company that holds assets and runs operations.
83
Orphan Company
A company whose shareholders do not form part of (or are not in the chain of title of) the Restricted Group and used for certain Securities offerings. Orphan Company Issuers may be owned, for instance, by a charitable trust, with the proceeds of debt offerings being on-lent to Operating Companies within the Restricted Group. This structure is sometimes used to avoid having to pay Withholding Tax on the Interest of a Bond but also to render remote the likelihood of the Issuer’s Insolvency.
84
PDMRs
Persons discharging managerial responsibilities.
85
Placement Agent
In a Private Placement, the Placement Agent is responsible for introducing the Issuer to QIBs and Accredited Investors which may purchase Securities of the Issuer on the Terms and Conditions set out in the Private Placement Memorandum and the Note Purchase Agreement.
86
Pledgor
Another name for a Chargor.
87
Portfolio Company
A company that has been purchased by a Sponsor and now sits in that Sponsor’s “portfolio”.
88
Principal Paying Agent
The bank that is responsible for coordinating the other agents appointed under the Paying Agency Agreement.
89
Printers
Refers to the professional financial printers who specialise in printing Offering Memoranda. Once the draft Offering Memorandum is in reasonably good shape, everyone agrees to “dump it” onto the Printer’s system. Further drafting sessions are then often held at the Printer’s conference rooms — essentially an excuse to hang out there, eat pizza and play video games while waiting for the next Turn of the Offering Memorandum.
90
Private Lender
See Public/Private Information Undertaking.
91
Process Agent
If yours is ever used, you are likely to have a problem as they facilitate the commencement of legal proceedings. For example, if a Borrower is incorporated outside of England, it is harder to start legal action against it than against an English company — this can be resolved, however, if the overseas company appoints an agent in England to accept service of the relevant legal documents on its behalf: this is the Process Agent. Process Agents can be other members of the group/affiliates or third-party professional agents — just make sure that, whoever it is, it tells you vey promptly if it starts to receive letters on your behalf. Also called an agent for service of process.
92
Property Company / Propco
In a Restricted Group or other group of companies whose primary activity consists of holding property, this is the company in which the property assets sit.
93
Public Lender
Lenders in a Facility financing that are prohibited from seeing “private” (non-public) information about the Borrower (such as projections) because they want to retain freedom to trade in the Securities of that Borrower or related companies. See Public/Private Information Undertaking.
94
QIB (Pronounced “kwib”)
Qualified Institutional Buyer.
95
QP
Qualified Purchaser.
96
Qualified Institutional Buyer
Large Institutional Investors that must have at least US$100 million invested in Securities or under management. Qualified Institutional Buyers are the permitted purchasers of Securities in Rule 144A Offerings.
97
Qualified Purchaser
Parties the SEC has deemed to be rich and/or sophisticated enough not to need the protection of state registration when they are offered or sold Securities in an offering by an Investment Company Issuer. Section 3(c)(7) of the Investment Company Act provides an exemption from registration if all of the Security holders of the Investment Company Issuer are Qualified Purchasers. The four categories of persons who possess the minimum standards of financial sophistication to be considered a Qualified Purchaser are: (i) individuals who own US$5 million in investments, (ii) Institutional Investors and other companies who own US$25 million in investments, (iii) familyowned companies that own US$5 million in investments and (iv) certain trusts in which the trustee and each settlor are Qualified Purchasers.
98
Qualifying Lender
Typically used in a Facility Agreement to describe a Lender which, at Closing, can be paid Interest gross, i.e., without deduction of Withholding Tax. If the law changes such that Withholding Tax becomes payable, a Qualifying Lender will typically benefit from a Tax Gross-Up.
99
Reference Banks
When the applicable IBOR is not available (or an agreed percentage — typically 30-50% of the Syndicate by commitments — declare that the applicable IBOR is less than their Cost of Funds), the Facility Agent or Principal Paying Agent needs to be able to determine an equivalent in order to calculate the Interest Rate. It may do so through the Reference Banks — an agreed list of financial institutions that provide a quote to the Facility Agent or Principal Paying Agent for the rate at which it could borrow funds in the relevant interbank market in the relevant currency for the relevant Interest Period. See also Market Disruption Clause.
100
Registrar
The agent of the Issuer whose principal task is to record ownership of the Registered Bonds in the register of holders.
101
Representative
The Initial Purchaser or Underwriter who is typically in charge of Book Building and Billing & Delivery. See Lead Manager.
102
Requisite Lenders
US-speak for Majority Lenders.
103
Restricted Group
Any party restricted by the Covenants in the Indenture, Terms and Conditions or the Facility Agreement, typically including the Issuer/Borrower, the Guarantors and the Restricted Subsidiaries.
104
Restricted Subsidiary
A defined term in Bonds that captures the Issuer’s subsidiaries to which the Covenants apply. Some Facility Agreements also have a concept of Restricted Subsidiaries but this is unusual and the Covenants will apply to the whole group, unless it is a Covenant Lite Facility Agreement. Compare Unrestricted Subsidiary.
105
Secured Lenders
Lenders who hold a given Security Interest. See Secured Parties.
106
Secured Parties / Secured Creditors
Those who hold or take the benefit of a given Security Interest. Generally defined to include the Lenders, the Facility Agent, the Security Agent, the L/C Issuing Bank, the Arrangers and the Hedge Counterparties, this group will incorporate all parties in favour of whom a grant of Security over assets has been made.
107
Security Agent
In a Secured Debt financing, the Agent to whom, on behalf of all the Secured Parties, all Security Interests in Collateral will be granted (save for certain European Security Interests which need to be granted directly to the Secured Parties). See also Parallel Debt and Security Trustee.
108
Security Trustee
Same as Security Agent, but used in countries, such as the UK, which recognise the trust concept (the Security Trustee holding the relevant Security Interests on trust for all the Secured Parties).
109
Shelf Company
The name given to a company which is acquired “off the shelf” having no assets or liabilities at that time. Not necessarily available in every European jurisdiction so this may need to be factored into the timetable when thinking about deadlines.
110
Significant Subsidiary
Another name for Material Company / Material Subsidiary.
111
Solicitation Agent
In the context of a Consent Solicitation, an Issuer may appoint an investment bank or other institution to serve as an intermediary to solicit consents from Bondholders to the proposed changes or Waivers to specified provisions of the Indenture. See also Dealer Manager Agreement.
112
SPAC
Special Purpose Acquisition Company.
113
SPE
Special Purpose Entity.
114
Special Purpose Acquisition Company
A company that raises money in order to pursue the acquisition of an existing company. Special Purpose Acquisition Companies are Shelf Companies that have no operations but are formed and raise capital with the intention of merging with or acquiring a company with the proceeds of the SPAC’s Securities offering.
115
Special Purpose Entity / Special Purpose Vehicle
Can be used in a number of different contexts. For example, a Special Purpose Entity can be a company that is set up within a corporate group in such a way so as to prevent the Insolvency of that company from affecting any other company within the group, often for a limited corporate purpose. A typical example here would be when a Special Purpose Entity is set up for the purpose of acquiring or operating a particularly risky asset or making investments. Special Purpose Entities are also used for the purposes of issuing Asset-Backed Securities, being structured to be “bankruptcy remote” from the risks of the corporate entities that transfer assets to the entity. Special Purpose Entities are often used to accomplish Off Balance Sheet Arrangements.
116
Sponsor
The private equity firm whose fund is the purchaser in a Leveraged Buyout, or the primary holder of the Equity interests in a particular Issuer/Borrower. The Sponsor representative in a meeting will be the one asking why things can’t be done faster.
117
SPV
Special Purpose Vehicle.
118
Steering Committee
Another name for the Coordinating Committee.
119
Strategic Buyer
A corporate acquirer in an acquisition that is acquiring for strategic reasons (e.g., to eliminate a competitor or expand into a new market). Strategic Buyers often have an advantage in an auction since they usually expect to benefit from Synergies if the deal goes through and can, therefore, pay more for the Target. Compare Financial Buyer.
120
Subsidiary Guarantor
A subsidiary of the Issuer/Borrower that acts as a Guarantor. See also Corporate Benefit, Financial Assistance and Guarantee Limitation Language.
121
Super Majority Lenders
Lenders needed for Super Majority Voting.
122
Syndicate
The group of banks and funds that have become the Lenders.
123
Syndication Agent
A title granted to a Lender during the Syndication process that carries no responsibilities (similar to a Documentation Agent). Essentially, it is a means for a Lender to get its name on the cover of a Facility Agreement and receive League Table Credit.
124
Target
The company or business being purchased in a transaction.
125
Third Party Beneficiary
An entity that is entitled to the benefits of some or all of the terms of a contract without actually being a party thereto. If you want there to be a Third Party Beneficiary, the contract should say so, in which case you have an “express third party beneficiary” (and if you are the Third Party Beneficiary, that’s the type you want to be). If you don’t want any Third Party Beneficiaries, the contract should also say that.
126
Topco
Shorthand for top company. This refers to the ultimate parent in a Restricted Group or other group of companies.
127
Transfer Agent
An agent of the Issuer who takes care of transferring Securities and other administrative tasks as agent of the Issuer.
128
Trustee
Performs as the Bond equivalent of a Facility Agent under a Facility Agreement. The Trustee has certain assigned duties and rights under the Trust Deed or Indenture that become particularly important following Defaults or Events of Default, and acts in a fiduciary capacity in the best interests of the Bondholders. Unlike an Administrative Agent, a Trustee will rarely own any of the underlying Securities and will not take any action unless it is provided with specific direction and indemnification from the Bondholders.
129
Underwriters
In Capital Markets, the investment banks that buy Securities in the initial purchase from the Issuer and then immediately resell them to the public in a public offering. More technically, and in brief, Section 2(a)(11) of the US Securities Act defines an Underwriter as any person who has purchased a Security from an Issuer or a controlling person of an Issuer with a view to distributing the Security. In loan world, the investment banks or other financial institutions that agree to be the initial Lenders pending Syndication. Typically the same entities as the Arrangers. See also Initial Purchasers.
130
Unrestricted Subsidiary
Subsidiaries to which most of the Terms and Conditions / Indenture Covenants do not apply. For this reason, the Covenants place a firewall between the Restricted Subsidiaries and the Unrestricted Subsidiaries, and transactions between an Issuer and its Unrestricted Subsidiaries will be treated similarly to transactions with unrelated parties. See Restricted Subsidiaries.
131
VC
Venture Capitalist
132
VCOC
Venture Capital Operating Company, a type of operating company satisfy requirements under the ERISA plan asset regulations.
133
Venture Capitalist
A person or investment firm that provides early stage funding to a company in return for an Equity interest. Often Venture Capitalists will bring technical or other expertise to the company. Irreverently sometimes referred to as vulture capitalists on the basis VCs may take a large Equity position for a relatively low price.
134
Well Known Seasoned Issuer
WKSIs are large-scale, seasoned Issuers that benefit from special treatment in public Securities offerings under SEC regulations. In particular, WKSIs are able to make offers to sell Securities before a Registration Statement has been filed and without regard to previously applicable Gun Jumping restrictions.
135
White Knight
In a hostile takeover situation, a friendly bidder who makes a rival bid for the Target in an effort to prevent a hostile bidder from acquiring the Target.
136
White Squire
In a hostile takeover situation, a person who acquires a significant stake in a company either by purchasing existing shares or subscribing for new shares, gaining a stake large enough to block a hostile takeover bid.
137
WKSI
Well Known Seasoned Issuer. Pronounced “wik-see”.
