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SECOND LIEN LENDING
UPDATE

Why the Second Lien Market Is Staying So Hot,
& How You Can Benefit From the Competition
Among Hedge Funds, Mezz Funds, & Senior Lenders

Featuring 19 Expert Speakers

Earn CLE Credits

Wednesday, June 8, 2005 (8 am - 5 pm)
Pre-Conference Workshop (optional) -- Tuesday, June 7 (2 pm - 5pm)

University Club
New York City

Designed to Meet the Needs of Middle-Market Investors, Lenders,
Investment Bankers, & the Professionals Who Advise Them

Faculty | Schedule | Registration | Location | Audiotapes | CLE Credit

The hottest segment of the buyouts market these days is that once-boring middle piece of the capital structure where mezzanine has long been the dominant tool.

Everybody used to call it a "sandwich," with senior secured debt on top, equities on the bottom, and mezzanine notes in the middle.

But now the simple sandwich has transformed into a "dagwood," and that change is causing confusion, even among the experts. For example, the mezzanine and senior layers have splintered into nearly a dozen different instruments with labels like "term B loans," "SCIL," "last out tranche," "stretch senior," and "tranche C," and terms like "standstills" and "waterfalls" have evolved into everyday lending documents. Collectively all these are related to "second lien loans," but each has very subtle but important differences.

The second lien market has skyrocketed to $11.2 billion, up from only $70.0 million in all of 2001. Fueling this huge increase are the hedge funds who have arrived with all the decorum of thirsty elephants shoving their way to a watering hole. In their search for returns they no longer can find in the stock market or in distressed debt, these funds are now willing to accept the increased risk of a junior position in order to gain a better return.

By attending this special MasterClass, you will learn what exactly the breeds of second lien loans are all about, why they are so increasingly popular, what the intercreditor issues are, why some less experienced fund managers may be getting in over their heads, and what predictions experts are making about where this market is going. Most of all, you'll get a sense of how your colleagues are negotiating and structuring their deals, and how they've wrestled with problems you may be about to face.

Attend This MasterClass and You'll Learn:

• What exactly are second lien loans and why are they so popular now?
• What are the differences among Term B, Term C, SCIL, Second Lien, Last Out Tranche, and stretch senior?
• General perspective on the second lien marketplace, its evolution, and supply and demand factors influencing the recent surge in volume.
• What are the key intercreditor issues?
• The difference between the origination market and the syndicated market.
• Why are hedge funds involved?
• What are the typical structures and terms?
• How has the syndicated loan market made second lien loans very efficient, and has it trickled down to the middle market?
• What are the differences between mezzanine and second lien debt, and how are mezzanine funds coping with the squeeze?
• How has the bond market been influencing second lien debt?
• What is the future of second lien lending -- is it here to stay?

The Optional Intercreditor Hangups Workshop:

Dealmakers say that legal intercreditor issues are the most challenging aspect of successfully consummating a financing that includes second lien debt. In this three-hour session, experts from the leading law firm of enumerate the various traps and pitfalls inherent in negotiating intercreditor issues, and give you the tools for avoiding them.

• what are the various forms of documentation, and how do you choose which one to use?
  
• what exactly are the differences between the rights of a senior lender and a junior lenders?
  
• under what circumstances can junior secured lenders ask for prepayments of their debt in advance of all repayment of the senior secured debt?
  
• how best do you negotiate payment of deal expenses?
  
• when should you plan to use "waterfall" provisions?
  
• how can you help satisfy the needs of two second lien lenders, e.g., if one is a cashflow lender and the other takes an assset-based approach?
  
• and much much more

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Faculty

Chaired By

• Cameron S. Fleming, Director--Sourcing, GoldenTree Asset Management LP

Hosted By

• Burt Alimansky, Managing Director, Alimansky Capital Group Inc., & Chairman, The Capital Roundtable

Speakers

• Peter E. Bennett, Managing Director, Goldsmith Agio Helms
• Stephen A. Boyko, Partner, Proskauer Rose LLP
• Gregory W. Cashman, Managing Director, Golub Capital
• Michael J. Conaton, Principal, Key Principal Partners LLC
• Bruce A. Eatroff, Executive Managing Director, Halyard Capital
• Joshua W. Easterly, Senior Vice President, Wells Fargo Foothill Inc.
• Michael J. Egan, Executive Vice President & COO, Monroe Capital LLC
• Steven M. Ellis, Partner, Proskauer Rose LLP
• James A. Feeley III, Partner, FriedbergMilstein LLC
• Timothy D. Fording, Vice President, Cerberus Capital Management LP
• Randall W. Gifford, Senior Vice President, LaSalle Debt Capital, LaSalle Bank NA
• Joel A. Holsinger, Managing Director, Navigant Capital Advisors LLC
• Adrian P. Kingshott, Managing Director, Amaranth Group Inc.
• William Koslo, Managing Director, CIBC World Markets Corp.
• C. Todd Kumble, Partner, SPP Capital Partners LLC
• Christopher MacDonald, Silver Point Finance LLC
• Joshua A. Pack, Managing Director, Fortress Investment Group LLC
• Alan S. Waxman, Managing Director, Goldman Sachs Group Inc.

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Schedule

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Registration

You can pay by credit card (using the links above) or by check: Mail your check and business card to: New York Business Roundtable Inc. 14 East 44th Street, Suite 400, New York, NY 10017.

Have a special question? Please contact Katie Safrey at 212/832-7333 ext. 103 or by email to: ksafrey@capitalroundtable.com.

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Location

University Club
One West 54th Street (corner of Fifth Avenue)
New York City
212/247-2100

Please note:  Dress code for the University Club is jacket and tie for men, and equivalent attire for women.

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Audiotapes

Can't attend but want to hear the program? You can buy the audiotapes along with the handouts for $495. Purchase the audiotapes online now.

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CLE Credits

New York State credits are 7.0 credit hours professional practice for the MasterClass and 3.5 for the pre-conference workshop; for the 60 minute/credit states (ex. CA, PA, TX etc.) 6.0 hours for the MasterClass and 3.0 for the workshop.

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Sponsor Information

Proskauer's Junior Capital Group is comprised of seasoned attorneys experienced and active in all aspects of the second-lien, mezzanine finance, and junior capital market. We represent the leading second-lien lenders and mezzanine lenders, including hedge funds, specialty finance companies, private mezzanine funds, SBICs, insurance companies, banks and private equity firms. Our junior capital attorneys provide practical advice that leverages our industry knowledge and formidable tax, private equity and restructuring expertise. Each lawyer is experienced in insolvency and intercreditor issues that are critical to all financing transactions. We have developed innovative structures to minimize tax consequences and maximize the economic returns for our clients. In addition, our junior capital attorneys have significant restructuring and insolvency experience, which we believe is invaluable in negotiating second-lien transactions and drafting intercreditor agreements. Junior capital is what we do; we know the market and we bring that experience to every transaction.

Proskauer is one of the nation’s largest law firms, providing a wide variety of legal services to clients throughout the United States and around the world. Headquartered in New York City since 1875, the Firm also has offices in Los Angeles, Washington D.C., Boston, Boca Raton, Newark, New Orleans, and Paris. Proskauer has been distinguished by its dedication to client service, technical excellence and high integrity, and has adapted rapidly to changes in the needs of businesses, whether it be for expertise in emerging areas of law, employing new methods of communicating, or deploying the latest information technology. The Firm has a long history of providing business entities with traditional services including: Corporate Finance, Private Equity, Mergers and Acquisitions, Securities; Tax; Litigation; Real Estate, and Labor and Employment advice.

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