Courtesy of Charles Calloway (Greenberg Traurig)
Over the past two years, the Transaction Process Management Committee—co-chaired by current ACIC President Bryan Cho (VP and Associate General Counsel, MetLife) and Charles Calloway (Shareholder, Greenberg Traurig LLP)—led an update of all four ACIC Model Form Note Purchase Agreements to better reflect current market practice, evolving buy-side expectations, and developments in the law/regulations. The effort incorporated extensive input from leading institutional investors, law firms, and investment banks. The individual Committee members can be found here, and include participants from:
Investment Participants – Aflac Global Investments; Corebridge Financial; John Hancock/Manulife; MetLife; Nationwide Mutual Insurance Company; New York Life Insurance Company; Northwestern Mutual; Prudential Private Capital; Sun Life Capital; and Voya Investment Management LLC
Law firm participants – ArentFox Schiff; Chapman and Cutler; Eversheds Sutherland; Greenberg Traurig; Morgan Lewis; Morrison & Foerster; and Willkie Farr.
Summary of Updates
Across the updated Model Form Note Purchase Agreements, the revisions add and refine key closing deliverables and mechanics (including antifraud microdeposit-related language and additional closing deliverables such as debt ratings and offeree letters), expand and update issuer representations (including items tied to Securities Act Rule 502(c), OFAC-related coverage including the UK, and Investment Company Act considerations), and refresh investor eligibility concepts through an updated accredited investor representation.
The changes also strengthen ongoing reporting and covenant packages to reflect today’s diligence and monitoring norms. Updates include adding debt ratings as an express reporting requirement and expanding the “requested information” catchall to cover KYC information as well as updates tied to significant events or changes in organizational structure. The revised forms also introduce model frameworks for change-of-control prepayment offers and asset sale prepayment/covenant provisions, providing parties a practical starting point for negotiation. In addition, the updates add a priority of obligations covenant, along with a debt ratings covenant that mirrors recent changes adopted by the Securities Valuation Office (SVO) of the National Association of Insurance Commissioners. Finally, to improve clarity and operational efficiency, several housekeeping revisions address SVO fee coverage over the life of the transaction, confidentiality provisions, and electronic delivery.
The updated Model Form Note Purchase Agreements are available on the ACIC’s website here.
