LAW 6911: Development Financial Institutions Transactions Law (in Latin America and the Caribbean
Session 1: Development Finance Institutions
Learning Objectives:
- Understand the legal nature and purpose of DFIs
- Examine the legal frameworks governing DFIs in Latin America and the Caribbean
- Grasp the concept of privileges and immunities for DFIs
Content Blocks:
- The Status of DFIs under Public International Law (e.g., distinction from commercial banks and other financial institutions)
- An overview of DFIs in the region (e.g., IDB Invest, World Bank Group)
- An Introduction to Privileges and Immunities for DFIs (e.g., purpose, common immunities granted under international law)
Session 2: Loan Operations (Financial Intermediaries & Corporates)
Learning Objectives:
- Understand the structure and legal framework of loan operations.
- Analyze loan agreements and syndicated loan structures.
- Identify risk management mechanisms in lending operations.
Content Blocks:
- Introduction to Loan Operations in Corporate Finance.
- Legal Anatomy of Loan Agreements (reps and warranties, covenants, events of default).
- Cross-Border Considerations: Currency Risk, Jurisdictional Challenges.
Session 3: Supply Chain Finance
Learning Objectives:
- Grasp the legal frameworks underpinning supply chain finance mechanisms.
- Analyze risk allocation structures in cross-border trade finance.
- Understand legal enforceability of supply chain contracts.
Content Blocks:
- Overview of Supply Chain Finance Instruments (Factoring, Reverse Factoring, Inventory Finance).
- Structuring Supply Chain Transactions: Receivables Financing & Payment Terms.
- Legal Instruments: Guarantees, Letters of Credit, Performance Bonds.
- Jurisdictional Risks & Trade Barriers in International Supply Chains.
- DFIs Role in Facilitating Trade Finance.
Session 4: Loan Operations: Secured Lending
Learning Objectives:
- Understand the legal frameworks and mechanisms underpinning secured lending.
- Analyze security instruments and their role in credit enhancement and risk mitigation.
- Structure and assess comprehensive security packages in corporate and project finance.
- Evaluate inter creditor arrangements and enforcement scenarios in an event of default.
Content Blocks:
- Introduction to Secured Lending:
o Definition and significance of secured loans.
o Comparison with unsecured lending and risk allocation.
o The role of security in credit enhancement and risk mitigation.
- Security Instruments and Mechanisms
o Types of security: pledges, mortgages, charges, assignments, and liens.
o Legal requirements for creating valid security interests.
o Perfection and priority: registration, possession, and notice.
- Security Packages in Practice:
o Structuring a comprehensive security package for corporate and project loans.
o Security over movable vs. immovable assets.
o Cross-border enforcement of security and applicable legal regimes (e.g., UNCITRAL Model Law, local laws).
- Inter creditor Issues
o To Subordination agreement and pari passu clauses
o Enforcement rights and creditor coordination
- Case Study
o Review of secured loan agreement, analysis of collateral schedules and perfection of documents. Enforcement scenario: what happens in an event of default?
Session 5: Capital Markets
Learning Objectives:
- Understand capital markets instruments and legal considerations in issuance.
- Analyze regulatory frameworks in cross-border securities offerings.
- Examine roles of market participants in primary and secondary markets.
Content Blocks:
- Introduction to Capital Markets (Equity, Debt, Derivatives).
- Legal Process of IPOs and Bond Issuances (due diligence, covenants, indentures).
- Regulatory Environment in the US and LAC (SEC, CNV, etc.).
- Role of Development Financial Institutions in Capital Market Transactions.
- Market Participants: Issuers, Underwriters, Trustees, Investors.
Session 6: Technical Cooperation & Investments Instruments in Early-Stage Companies
Learning Objectives:
- Understand the legal structuring of technical cooperation agreements.
- Analyze blended finance structures and conversion mechanisms.
- Explore the role of technical cooperations in development finance.
- Understand and compare the legal structuring of investment instruments for early-stage companies, including convertible instruments.
Content Blocks:
- Introduction to Technical Cooperations (Purpose, scope, and linkages with blended finance).
- Legal Documentation of Technical Cooperation Agreements.
- Contingent Recovery Investment Grants (CRIGs): Structure, recovery mechanisms, and legal implications.
- DFIs Considerations in Structuring Technical Cooperation Projects.
- Investments Instruments in Early-Stage Companies (Convertible instruments such as SAFEs, KISS, and other hybrid mechanisms.)
- Role of incubators and accelerators for early-stage companies, support mechanisms and their interaction with DFIs.
- DFIs Considerations in Investments in early-stage companies (Legal, financial, and developmental impact perspectives)
Session 7: Technical Cooperation & Investments Instruments in Early-Stage Companies
Learning Objectives:
- Analyze legal documentation in equity investments and M&A.
- Understand structuring of venture capital transactions.
- Identify cross-border legal challenges in equity investments.
Content Blocks:
- Overview of Equity Investments: Shareholder Agreements, Subscription Agreements.
- Acquisitions: Due Diligence, SPAs vs. APAs, Representations & Warranties.
- Venture Capital Transactions: Term Sheets, Liquidation Preferences, Anti-dilution.
- DFIs Role in Equity Transactions (Governance, Investor Protections).
- Cross-Border Legal Challenges: Regulatory Approvals, Shareholder Disputes.
Session 8: Investment in Private Equity Vehicles (Funds)
Learning Objectives:
- Understand the legal structuring of private equity funds.
- Analyze limited partnership agreements and side letters.
- Examine compliance frameworks in fund governance.
Content Blocks:
- Private Equity Fund Structures: GP-LP Model, Lifecycle Phases.
- Key LPA Clauses: Capital Commitments, Carried Interest, Clawback.
- Side Letters: Custom Investor Terms & Legal Implications.
- Regulatory Environment: AIFMD (EU), SEC (US), LAC Standards.
- DFIs Considerations in Fund Investments (Transparency, Governance).