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terminy

Credit Agreement Mfn

3:14 9.4.2021 Napsal: petr.stibor

For financing an additional acquisition through an incremental credit facility, additional debt may take the form of additional maturity debt or an increase in revolving bonds. While there are several nuances for incremental debt capacity and changes in market practice, many modern credit facilities contain three primary incremental baskets: given the prevalence of incremental facilities in recent years, many corporate sponsors and borrowers who use incremental facilities (or at least incorporate the provisions of the optional lending facility into the agreements) will have eased , subject to the agreement reached with the group of lenders on certain important commercial terms, a privileged form of incremental provisions of the facilities with which they are comfortable and therefore use most of their lending operations. In this context, it remains to be seen whether or not the wording of the LMA is taken up in full or in part by the credit market, while the incremental facilities provisions that the LMA has included in its recommended form of agreement on loan-financed facilities do not seek to take into account all the potential relevant variables that can be seen in the current incremental facilities. they are a useful starting point, particularly for a number of business borrowers and for small and medium- and medium-sized enterprises. It is perhaps not surprising that the terms of the DFN provisions are often one of the most negotiated components of a credit facility, lenders wishing to apply MFN to all incremental debts and borrowers trying to limit its application as much as possible. While it is generally true that the provisions of the MFN are triggered when the overall return on the new tranche of pani-passu debt exceeds the total proceeds of the existing debt, there may be exceptions and restrictions. Some are the most common: in most cases, a specific credit contract will have only a few of these exceptions. In the case of promised financing, MFN exemptions are often subject to a „market reflex,“ allowing arrangers to modify or remove exceptions to the MFN to facilitate syndication of underlying debt. In practice, it is clear that a borrower can first go to his existing group of lenders if he tries to take on additional debts, because his existing business relationships and the lenders` familiarity with credit will help the negotiations and the speed of execution. However, this is largely a point in that the requirement for borrowers to seek additional financing from their existing group of lenders before moving into a larger market, and only if existing lenders cannot borrow sufficient debt, has become increasingly rare in recent years, given the potential impact this process could have on timeliness and trade negotiations.