Notes from inside the documentation.
Three problems we have spent real time on, written up because the answers are not in the market precedents and someone will otherwise have the same argument next quarter. These are working notes on structuring practice rather than marketing; they are useful to lenders and borrowers alike, and we would rather the objections were well understood before a term sheet than discovered during one.
Account control agreements do not attach to electronic money institutions
The instrument every credit committee asks for is the one the counterparty cannot sign. What replaces it, what breaks in the surrounding documents when you make the substitution, and the four places security quietly leaks if you do not follow it through.
If the customer agreement is the invoice, what happens when the invoice is wrong?
A common definition in receivables documentation makes the invoice the source of the obligation. Follow it through the representations and it contradicts itself. The distinction between the contract and the record is not academic; it decides whether an administrative error is a correction or an eligibility failure.
A fraud definition that uses the word fraudulent is not a definition
Zero fraud tolerance is a reasonable covenant. Attached to a circular definition and a discretionary deeming right, it stops being a credit protection and becomes an option. What an objective test looks like in a market whose main loss vector is artificially inflated traffic.
The structure note covers the security package instrument by instrument, the funding and collection cycle, enforcement and servicer replacement, and the questions credit committees ask most often. It is the practical companion to the pieces above.