• A Few Considerations for Your Next Borrowing Base Transaction
  • August 22, 2011
  • Law Firms: Burr & Forman LLP - Nashville Office ; Burr & Forman LLP - Atlanta Office
  • Since the economic downturn that began in late 2007, commercial bankers (who have not traditionally engaged in "asset based" lending) are often being inculcated into the process of closing new borrowing base transactions and they are even linking collateral in existing transactions more closelyto borrowing levels, when events like covenant violations present the opportunity to do so. Borrowing base transactions may seem relatively straightforward, but in our experience there are several potential pitfalls for an unwary commercial banker in documenting borrowing base transactions. This short piece suggests two, for illustration.