Draft Credit Agreement Pipeline Acquisition

Skill: Draft Senior Secured Credit Agreement for Energy Infrastructure Acquisition Financing

1. Subject-matter triage (only if applicable)

• Treat the credit agreement as the primary deliverable and the issues memo as secondary.
• Draft the operative agreement first, then prepare the memo only after the agreement exists and is complete enough to review.
• Before finishing, verify that the agreement file is non-empty and contains operative clauses, and that the memo file is non-empty and contains actual issues analysis rather than a summary of intent.
• If multiple source documents govern the same point, enumerate them first and decide which document controls, which is subordinate, and which conflict remains open for client decision.

2. Failure modes the skill is correcting

• Produces a complete-looking credit agreement but leaves inconsistencies among the source documents unresolved, rather than identifying the conflict, choosing a drafting resolution, and flagging the judgment call.
• Copies standard leveraged-finance language without adapting it to regulated infrastructure collateral, approval conditions, or asset-specific closing mechanics.
• Misses economic or covenant mismatches that would create immediate breach, unintended pricing asymmetry, or structural subordination.
• Drafts the agreement but omits a companion issues memo that records conflicts, ambiguities, gaps, and the rationale for each drafting choice.
• Fails to connect covenant mechanics to the borrower’s operating model, project budget, customer concentration, or regulatory timetable.
• Treats lender economics as interchangeable even where the source documents specify individual commitments or facility-specific pricing terms.
• Uses vague issue descriptions that do not state the consequence to closing, compliance, economics, or enforceability.

3. Legal frameworks / domain conventions that apply

• Start from the source documents as the governing drafting record; when they conflict, resolve by hierarchy, commercial importance, and closing feasibility, then memorialize the choice in the memo.
• Use ordinary senior secured credit agreement architecture, but adapt collateral, conditions precedent, and covenants to the project’s regulatory and asset profile.
• For collateral involving regulated or consented contracts, distinguish between assets that can be assigned or perfected under ordinary secured-transactions principles and assets that require approval, consent, or alternative control rights.
• For closing conditions tied to governmental or regulatory approvals, include receipt of required approvals as an express condition precedent and separate any post-closing covenant only where the approval can lawfully follow closing.
• For real-property or recording-sensitive collateral, include any necessary recording, mortgage, fixture filing, or analogous perfection steps consistent with the collateral package.
• For revolvers in a capital structure that also includes term debt, consider a springing maturity tied to residual term debt outstanding before revolver maturity to avoid a revolver surviving beyond the term takeout horizon.
• For covenant design, align capex limits with the project budget or provide a defined basket/exception if the budget would otherwise create immediate breach.
• For revenue concentration, if key customer contracts are material to repayment and may expire before maturity, build in a maintenance covenant, replacement requirement, coverage test, or reserve concept that preserves credit quality through the term.
• For pricing mechanics, check whether the term loan and revolver have different base-rate floors or other asymmetries that materially change economics in a low-rate environment.
• For cure mechanics, limit any equity cure to the relevant testing period and exclude it from repeated inflation of leverage or from sweep calculations where necessary to prevent recycling of the same capital benefit.
• State each legal proposition with the controlling authority or drafting convention supporting it when that authority is identifiable from the materials or from standard finance practice.

4. Analytical scaffolds

• Build a conflicts log before drafting the agreement.
• For each material provision, identify the source document, compare competing instructions, select the drafting resolution, and record any open judgment call.
• Use this sequence for each provision:
  1. identify the governing source language;
  2. check all other source documents for tension;
  3. draft the clause;
  4. note whether the point is resolved or reserved for confirmation.
• For each issue in the memo, state the source conflict or gap, the drafting resolution or recommendation, the rationale, and whether client or counterparty confirmation is needed.
• When an issue depends on a numeric or temporal trigger in the source materials, anchor the discussion to the relevant threshold, date, term, or budget period rather than describing the issue in the abstract.
• When an issue interacts with another clause, schedule, or document, identify that interaction expressly and explain the downstream effect on closing, economics, operations, or compliance.
• If several facilities, parties, periods, or counterparties are implicated, address each one separately rather than collapsing them into a single generalized analysis.

5. Vertical / structural / temporal relationships (only if applicable)

• Map the financing structure across facilities, maturities, pricing, collateral, and covenant timing before finalizing the draft.
• Check that revolver maturity does not extend past the point at which outstanding term debt would create a structural mismatch.
• Check that any step-down, sweep, or cure feature is internally consistent across testing periods, sweep periods, and covenant measurement dates.
• Check that any capex covenant, reserve requirement, or concentration covenant fits the expected operating timeline and does not create immediate technical default.
• Check closing conditions against the actual regulatory and approval timeline so the agreement does not close before required approvals exist.
• If the collateral package changes over time, distinguish closing deliverables, post-closing obligations, and ongoing maintenance covenants.

6. Output structure conventions

• Deliver the credit agreement as the primary, operative document with standard senior secured credit agreement provisions plus any asset-specific provisions required by the transaction.
• Deliver a companion issues memo that is organized by issue and uses a consistent entry structure: source documents implicated, conflict or gap, drafting resolution or recommendation, rationale, and whether confirmation is still needed.
• For each memo entry, indicate whether the point is resolved in the draft or remains open.
• Include a recommended actions section at the end of the memo that gives concrete next steps, assigns them to the appropriate role, and ties them to the relevant closing or regulatory milestone.
• Use conventional legal drafting style in the agreement; use concise, decision-oriented prose in the memo.
• Do not rely on a description of issues alone; every memo entry must connect the issue to its legal, economic, operational, or transaction consequence.
• When the source materials identify specific authorities, permissions, or required approvals, carry those through into the draft and memo rather than substituting generic placeholders.