Five Considerations When Engaging an Administrative or Facility Agent

There are several key functions performed by every administrative or facility agent, no matter the loan transaction. Being informed about an agent’s role will help determine the right choice for your needs. The team at SRS Acquiom has identified five key components to keep top-of-mind when engaging your next administrative or facility agent. 

1. Understand the role of an administrative or facility agent   

   The administrative or facility agent is the intermediary between lenders and borrowers and facilitates the relationship while handling the transactional duties. 

2. Consider the experience of the administrative or facility agent 

   The loan agency team should have the necessary legal, operational and relationship skills to work with knowledge, speed, and accuracy to quickly address inquiries and spot potential issues.

3. Ensure that the administrative or facility agent is readily available and unbiased 

   A neutral, third-party provider will ensure all deal parties are on equal footing and receive the same attentive care and attention.  

4. Be sure the administrative or facility agent is familiar with all types of loans   

   An agent with experience in handling a range of loans with different syndications and complexities will be better positioned to handle any unexpected scenarios that arise.

5. Understand what happens when a loan becomes distressed 

   In a distressed situation, an administrative or facility agent will facilitate lender calls and act upon their directions as appropriate within the parameters of the loan documents. 

Administrative or Facility Agent Considerations 

Understand the role of an administrative or facility agent   

The administrative or facility agent serves as a relationship manager for lenders and the borrower and performs operations that are critical for a transaction. Consider what type of loans the agent has worked on and what expertise may be beneficial to your deal.    

From a relationship perspective, the right agent will nimbly work through the transaction's various functions and understand the credit agreement as well as any legal documents.  

The agent should also be able to retrieve information quickly and respond to questions in a timely and accurate manner, including those pertaining to contracts, waivers and amendments, and compliance metrics. 

From an operational vantage point, the administrative or facility agent will set up and track loans, including setting interest rates, calculating payments, and providing parties with payment notices. This role should manage all financial and operational components of a loan. 

An agent that is adept at both relationship management and deal “know-how” will ensure a smooth and accurate transaction. 

Consider the experience of the administrative or facility agent 

An informed, trained, and educated agent will work through legal agreements, notices, and any relevant documents efficiently and intelligently. The internal team should include attorneys on-staff so that (often expensive) outside counsel is not required. Understanding all the transaction documents and contracts will ensure a thorough evaluation and a timely turnaround. 

An administrative or facility agent must provide excellent communication with all parties related to the transaction. Being able to quickly relay all necessary information is of utmost importance.  

Ensure the administrative or facility agent is readily available and unbiased    

A reliable and attentive administrative or facility agent is service-oriented and focuses on clients' needs first. The ideal agent is a neutral, third-party provider that will ensure all deal parties are on equal footing and receive the same care and attention.  

Agents should not only be responsive to clients' needs but should also solicit feedback from them to actively address and implement changes where necessary. Access to advanced technology and the ability to evolve in a constantly changing market will distinguish a good agent from a great one and will help ensure a smooth transaction and superior client experience.  

Be sure the administrative or facility agent is familiar with all types of loans   

No two loans are the same. A syndicate of 50 lenders differs from one with 500lenders. The ideal agent will be able to handle both effectively and will be experienced with managing the details, timelines and paperwork pertaining to either situation. 

Complex loan agreements are common. The most nuanced transactions will be successfully administered by an experienced administrative or facility agent where few scenarios will be unexpected.  

Understand what happens when a loan becomes distressed 

While it is never ideal for a loan to become distressed, a prepared administrative or facility agent can make the situation less taxing. An agent will facilitate lender calls and act upon their direction within the parameters of the loan documentation. Though the lenders can steer the direction of the loan, an agent must implement the lender’s decisions, continuously provide the lender with updates, and seek guidance from the lenders.    

Weighing the factors above when considering an administrative or facility agent will increase the likelihood of a smooth, well-managed transaction regardless of what may happen during the pendency of the transaction.