Q: Do I need an opinion from borrower's counsel on
an amendment to an existing credit agreement?
A: Opinions from borrower's counsel are routinely provided
on the due authorization, execution, delivery and enforceability of
all documents executed by a borrower on an initial financing.
However, borrowers typically resist a requirement for the delivery
of a similar opinion on an amendment to the credit agreement so as
to avoid the additional time and costs associated with the delivery
of that supplementary opinion.
The decision to require an opinion on an amending agreement will
involve a consideration of several factors relating to the content
and scope of the amendment:
New Advance of Funds - if the amendment
involves an increase in a credit facility, a new advance or
facility, or the introduction of a new monetary obligation, then an
opinion is advisable to ensure the initial authorization of the
board extends to the increased funding
