Differences between a note purchase agreement and a credit agreement, other than one is the purchase of notes and the other is the commitment of loans? What are the key differences, I’m reading an NPA and it’s substantially similar to a CA.

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The difference is that for the NPA, you’re buying debt that has already been issued. You not have the right to collect it, but, depending on the NPA, the purchaser is no longer under the obligation to extend new credit—you simply have the right to collect the debt. Under a CA, you have to extend credit and, depending on the CA, have an obligation to fund extend credit with your own (or a syndicate’s) cash. It is nuanced, but that is the general difference.

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Sometimes an NPA is just a credit agreement with loans changed to notes, loan parties changed to note parties, borrowings changed to purchases, etc. You’ll see NPAs that were just conformed from a credit agreement quite often, sometimes because existing debt has covenants that would permit an issuance of notes but not borrowing debt.

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Good point. Again the NPA will often reference a lot—and incorporate a lot—of an underlying CA (if aplicable).

Good clarifying point there!

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