Draft Commitment Letter

---
name: draft-commitment-letter
task_id: banking-finance/draft-commitment-letter
description: Drafts a commitment letter and issues memo for an acquisition financing, applying limited conditionality conventions and reconciling economic terms across deal documents.
activates_for: [planner, solver, checker]
---

# Skill: Acquisition Financing Commitment Letter Drafting with Issues Memo

## 1. Subject-matter triage
- Treat the commitment letter as the primary deliverable and the issues memo as secondary.
- Build the financing package around a leveraged acquisition closing, with separate attention to commitment mechanics, funding conditions, fees, collateral, and post-closing deliverables.
- If the source set includes multiple draft forms or iterations, identify the operative version first and use it as the anchor for drafting and reconciliation.

## 2. Failure modes the skill is correcting
- Including an overly broad market disruption or funding condition where acquisition-financing practice calls for tighter, transaction-specific conditions.
- Drafting flex provisions without an aggregate economic cap or a necessity qualifier, leaving the arranger unconstrained.
- Failing to reconcile economic and structural terms across the commitment package and related transaction materials, creating internal inconsistencies.
- Requiring full collateral perfection at closing rather than using a post-closing period for non-essential items, which is impractical for large secured facilities.
- Omitting compliance-timing items such as KYC / beneficial ownership / AML deliverables until after the expected closing timetable has already been set.
- Treating OID, fees, and sources-and-uses treatment inconsistently across the package.
- Overstating indemnity rights without the customary carve-out for the arranger’s own misconduct.
- Leaving exclusivity, confidentiality, or fee-letter terms ambiguous in a way that exposes sensitive economics.

## 3. Legal frameworks / domain conventions that apply
- Limited conditionality: acquisition-financing commitment letters generally confine funding conditions to transaction-specific items, financing-document deliverables, fee payment, and narrowly defined target-related fundamentals.
- Market disruption practice: any market disruption concept should be reviewed for scope, trigger mechanics, and consistency with prevailing leveraged-finance practice.
- Flex provisions: syndication flex should be checked for an aggregate economic cap, a necessity qualifier, and any unusually broad covenant or structural flex.
- Collateral perfection: large secured financings often distinguish between closing deliverables and post-closing perfection items; the drafting should reflect that split.
- KYC / beneficial ownership / AML: bank-compliance deliverables can be closing conditions, but the required timing must be tested against the expected signing-to-closing path.
- OID and fee treatment: original issue discount is typically reflected as a proceeds reduction, not as a standalone fee item; sources and uses should match the draft economics.
- Indemnification: arranger indemnities are typically reviewed for an exception for the arranger’s own gross negligence and willful misconduct.
- Exclusivity and confidentiality: confirm whether any prior exclusivity remains live and keep sensitive fee-letter economics out of the public-facing commitment text.
- Cross-document consistency: pricing, maturity, collateral scope, covenant mechanics, and condition precedents should be aligned across the commitment letter, term sheet, and any related transaction materials.
- Authority discipline: when the draft or issue memo relies on a rule, practice standard, or market convention, identify the supporting authority or convention by name rather than stating the conclusion nakedly.

## 4. Analytical scaffolds
1. Deal architecture: identify the financing type, parties, facility mix, and the role each document plays in the package.
2. Conditionality review: narrow each closing condition to transaction-specific, practice-conforming language.
3. Economics reconciliation: compare pricing, fees, OID, flex, collateral, and covenant mechanics across the source set and resolve inconsistencies.
4. Compliance timing: test KYC / beneficial ownership / AML and similar bank deliverables against the proposed closing schedule.
5. Collateral timing: separate core closing deliverables from post-closing perfection items and draft accordingly.
6. Flex and syndication: confirm any flex package is bounded and justified by syndication needs.
7. Confidentiality and indemnity: preserve fee sensitivity and include market-standard risk allocation.
8. Issue memo drafting: capture each issue with source support, severity, cross-reference, consequence, and a concrete proposed fix.

## 5. Vertical / structural / temporal relationships
- Sequence the package from commitment issuance to signing, then closing, then post-closing perfection and deliverable completion.
- Distinguish lender-side deliverables due at issuance or closing from borrower-side deliverables that can follow after closing.
- If the materials include multiple draft dates or versions, compare them chronologically and flag any term drift that affects the operative package.
- If the package contains multiple facilities, analyze each facility separately before synthesizing package-wide economics or conditions.

## 6. Output structure conventions
- Commitment letter draft: produce a complete, operative document with standard financing provisions tailored to the transaction, not a summary of the provisions.
- Issues memo: use a defined ordinal severity scale at the top and apply it uniformly to every issue.
- For each issue, state the source document(s), the exact inconsistency or drafting risk, the relevant controlling authority or market convention, the practical consequence, and the proposed resolution.
- Where multiple terms or variants exist in the source materials, enumerate them before analysis instead of collapsing them into a single generalized note.
- Close the memo with a concise Recommended Actions section that assigns each action to a responsible role and ties it to a signing or closing milestone.
- Keep confidential economics out of the memo unless they are necessary to explain the drafting issue; do not reproduce sensitive fee-letter detail beyond what is needed to identify the problem.
- Before finishing, confirm that the commitment-letter file exists, is non-empty, and contains operative drafting, and that the issues memo file exists, is non-empty, and contains concrete recommendations.