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Message: <blockquote data-quote="Andrei Radu" data-source="post: 223331" data-attributes="member: 36777">Hi [USER=41021]@CharlesT47[/USER]  I think you could justify an interest by focusing on how the strategic objectives of institutional lenders impacts the legal work you do. As a sponsor in a leveraged buyout, you are trying to present the state of the target business in as favourable of a light as possible, to then be able to negotiate the lowest interest rates and most flexible repayment terms possible for as much debt financing as possible. As a lender, you want to scrutinise the target business and the sponsor's proposals as throughly as possible to ensure you can negotiate the best security and interest payments that you can. From this position, looking at the role of lawyers, you could conceptualise the lender's counsel by analogy to a buyer's counsel in M&A transactions: in highly leveraged PE transactions, the baks are putting in most of the money and thus taking on most of the downside risk; as such, they want to be very certain as to the value of the underlying business and the protection offered by the terms of the loan to be willing to provide the necessary financing. Thus, legal work on behalf of leaders, through due diligence and research to scrutinise target businesses and review proposals of terms, and the negotiations and drafting work done to implement favourable terms, is crucial to safeguard their interest in high-risk transactions. This can be attractive because of the high level of responsibility it can involve and because of the many opportunities to learn about the operations and assets of target businesses and how to value them. Furthermore, working for a lender you will normally get to advise on transactions involving a greater variety of PE funds and on deals in a greater variety of industries (as there are only a few big investment banks, but there are many more active PE funds in the market). Finally, you could also consider how the higher interest rate environment of the last few years has shifted the bargaining position in favour of lenders  - after the rise of PE in the 2010s has led to a status quo of very sponsor-friendly terms. Arguably, this means that lawyers acting for investment banks should have more of an opportunity to value-add by pushing for better deal terms, which could be an attractive aspect for up-and-coming lawyers.</blockquote>

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