Draft Commitment Letter

---
name: draft-commitment-letter
task_id: corporate-ma/draft-commitment-letter
description: Guides drafting of a leveraged acquisition commitment letter and companion issues memo, requiring identification and resolution of cross-document economic inconsistencies and flagging of non-market conditions that may be inappropriate as unconditional funding conditions.
activates_for: [planner, solver, checker]
---

# Skill: Draft PE Acquisition Financing Commitment Letter

## 1. Subject-matter triage

- Treat the commitment letter as the primary deliverable and the issues memo as secondary support.
- Draft the operative financing document first, then prepare the issues memo only after the draft is complete and internally coherent.
- If the source set contains multiple facilities, tranches, pricing options, dates, or conditional pathways, enumerate them before analysis and draft each item distinctly rather than collapsing them into a generic blended description.
- If only one facility or one closing path exists, say so expressly and draft to that single path.

## 2. Failure modes the skill is correcting

- Drafting a commitment letter that leaves the core economics, closing conditions, or funding mechanics internally inconsistent across the deal materials.
- Allowing a broad adverse-change or similar open-ended funding condition to survive unqualified when the deal materials call for narrower, customary closing risk allocation.
- Conflating OID, upfront fees, benchmark floors, spreads, and other pricing components instead of separating each economic term cleanly.
- Missing cross-document mismatches in amortization, prepayment or sweep mechanics, springing covenant triggers, or timing for KYC / beneficial ownership deliverables.
- Delivering only the main letter or only the memo, rather than a complete financing package with the operative document first and the issues analysis after.
- Issuing issue spots that are descriptive but not action-oriented, or that fail to identify the practical consequence of the mismatch.

## 3. Legal frameworks / domain conventions that apply

- Commitment letters in leveraged acquisition financings should reflect a market-consistent allocation of closing risk, with conditions to funding tied to specified deliverables, reps, and customary documentary conditions rather than an unrestricted escape hatch.
- Financing economics should be stated component-by-component: benchmark, spread, floor, OID, upfront fees, and any flex mechanics should not be blended into one number or left ambiguous.
- Amortization, maturity, and prepayment/sweep provisions must be expressed in a way that is internally consistent with the anticipated credit documentation and the term sheet.
- Springing covenant mechanics must state both the testing trigger and the utilization calculation with the same operational assumptions across all deal materials.
- KYC and beneficial ownership delivery obligations should be tied to a concrete closing timetable and measured in business days or another explicit timing anchor.
- Cross-document inconsistencies should be resolved before execution, with the commitment letter aligned to the higher-order deal economics unless the materials expressly state a negotiated deviation.
- Any legal conclusion about whether a condition is customary or overly broad must be tied to the governing contract language and the applicable market convention for leveraged acquisition financing.

## 4. Analytical scaffolds

### Commitment letter drafting scaffold

1. **Parties and facilities**
   - Identify the borrower, the committed lenders or arranger, and each committed facility.
   - State the commitment amount for each facility and avoid vague references to unspecified “financing.”

2. **Use of proceeds and transaction context**
   - Tie the commitments to the acquisition and related refinancing or fee funding only to the extent supported by the source materials.
   - Keep acquisition financing and post-closing working capital or other ancillary uses distinct if the materials do so.

3. **Pricing and economics**
   - State the benchmark, spread, any floor, OID, and fees separately.
   - If the materials contain multiple pricing references, reconcile them and carry forward the governing number set consistently.
   - Avoid embedding scenario-dependent arithmetic; state the operative economic terms in plain contractual language.

4. **Maturity and amortization**
   - Specify the maturity date and any amortization schedule for each facility.
   - If amortization varies by tranche or period, set it out cleanly and do not compress distinct mechanics into one sentence.

5. **Funding conditions**
   - List the closing conditions in a customary acquisition-financing sequence.
   - Scrutinize any adverse-change condition for breadth and alignment with the other conditions.
   - Separate delivery conditions, legal-opinion conditions, no-default conditions, and documentary conditions so the package reads as a coherent closing standard.

6. **Flex and allocation mechanics**
   - Include any flex rights, syndication protections, or allocation mechanics only to the extent supported by the materials.
   - Ensure flex provisions do not silently override the stated economics or create hidden inconsistency with the commitment economics.

7. **Prepayment and sweep mechanics**
   - State any excess cash flow sweep or leverage-based step-down mechanics clearly.
   - Confirm the threshold logic, step-down trigger, and rate changes are consistent across the materials before carrying them into the draft.

8. **Springing covenant**
   - Identify the trigger level and the utilization calculation method.
   - Make sure the trigger is expressed consistently with the related revolver or liquidity assumptions.

9. **Closing deliverables and KYC**
   - State the delivery deadline for organizational, KYC, and beneficial ownership items in relation to closing.
   - Use the timetable in the source materials rather than inventing a new one.

10. **Termination and indemnity**
    - Include customary termination and indemnification concepts.
    - Do not expand them into open-ended liabilities unless the source materials support that result.

### Issues memo scaffold

1. **Start with a short issue inventory**
   - Organize each inconsistency or drafting concern as its own entry.
   - Assign a severity label using a consistent ordinal scale defined once at the top of the memo.

2. **For each issue, include three closing moves**
   - State the scale of the issue using a figure, threshold, date, or transaction milestone drawn from the materials.
   - Cross-reference the other clause, schedule, letter, or draft term that interacts with it.
   - State the downstream consequence for the client if left unresolved.

3. **Recommendation discipline**
   - End each entry with a concrete proposed fix, not just a diagnosis.
   - Frame the fix as a drafting or coordination action that a deal team can actually implement.

4. **Prioritize true mismatches**
   - Focus on terms that affect economics, closing certainty, leverage, covenant operation, or documentation timing.
   - Avoid burying the reader in stylistic nits unless they affect interpretation.

## 5. Vertical / structural / temporal relationships

- Track the hierarchy among the commitment letter, term sheet, summary materials, and anticipated credit documentation; where there is tension, identify which source governs by deal design or explicit instruction.
- Track how one term changes another over time, especially where leverage-based step-downs, springing covenants, or closing deliverable deadlines depend on later events or specified business-day intervals.
- Keep the chronology of signing, syndication, closing, and post-closing deliveries explicit so that conditions are not accidentally drafted as pre-closing requirements when they are intended to be post-closing obligations.
- When the source materials refer to multiple economic levels or thresholds, preserve the sequence and direction of each threshold so the draft does not invert the intended mechanic.

## 6. Output structure conventions

- Produce a substantive, document-ready commitment letter as the main file, with operative clauses rather than an outline or commentary.
- Produce a separate issues memo that is concise but complete, issue-by-issue, and written for a deal team audience.
- In the issues memo, define a uniform severity scale once at the top and apply it consistently to every entry.
- For each issue entry, state the mismatch, identify the interacting source provisions, explain the client consequence, and give a practical resolution path.
- End the issues memo with a short Recommended Actions block that assigns each action to a role and ties it to a timing anchor from the transaction process.
- Keep the drafting style market-oriented and internally consistent; if the source set supports a narrower or more specific formulation than a standard market formulation, reflect that specificity in the draft.
- Before finishing, confirm that the primary deliverable exists and is non-empty, then confirm the memo exists and is non-empty.