Event of default: Difference between revisions
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An event of default is the event of breaching a loan agreement or other similar agreement | |||
The occurrence of an event of default normally expressly permits the lender to accelerate repayment of the amount outstanding on the loan and to cancel any further lending. However, the lender is not obliged to and may choose not to accelerate repayment. | |||
Each loan agreement will normally define exactly what constitutes an event of default of that agreement. | Each loan agreement will normally define exactly what constitutes an event of default of that agreement. | ||
Events of default will generally include: | Events of default will generally include: | ||
*any failure to pay interest or capital on a due date, | *any failure to pay interest or capital on a due date, | ||
*any failure to comply with a covenant, and | *any failure to comply with a covenant or breach other obligations under the agreement, and | ||
*any inability to repeat a representation. | *any inability to repeat a representation. | ||
Cross defaults are defaults in one facility that constitutes a default in another. | |||
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* [[Default]] | * [[Default]] | ||
* [[Financial covenant]] | * [[Financial covenant]] | ||
* [[Forbearance]] | |||
* [[Grace period]] | * [[Grace period]] | ||
* [[Insolvency]] | |||
* [[Loan agreement]] | * [[Loan agreement]] | ||
* [[Material adverse change]] | * [[Material adverse change]] | ||
* [[Mortgage]] | |||
* [[Putting a limit on losses]] | |||
* [[Representations and warranties]] | * [[Representations and warranties]] | ||
* [[Waiver]] | * [[Waiver]] | ||
[[Category:Compliance_and_audit]] | [[Category:Compliance_and_audit]] | ||
[[Category:Identify_and_assess_risks]] | [[Category:Identify_and_assess_risks]] | ||
Latest revision as of 15:23, 27 March 2021
An event of default is the event of breaching a loan agreement or other similar agreement
The occurrence of an event of default normally expressly permits the lender to accelerate repayment of the amount outstanding on the loan and to cancel any further lending. However, the lender is not obliged to and may choose not to accelerate repayment.
Each loan agreement will normally define exactly what constitutes an event of default of that agreement.
Events of default will generally include:
- any failure to pay interest or capital on a due date,
- any failure to comply with a covenant or breach other obligations under the agreement, and
- any inability to repeat a representation.
Cross defaults are defaults in one facility that constitutes a default in another.
