Defaulting lender

Borrowing and lending - documentation.

The concept of a defaulting lender is an element of borrowing and lending documentation, designed for the protection of the borrower.

It includes situations in which the lender fails to honour its commitment to provide funds under borrowing documentation, or gives notice that it will do so, or becomes insolvent.

When a lender becomes a defaulting lender under the borrowing documentation, the borrower enjoys additional rights to protect its position as borrower.

Defaulting lender provisions are part of Lehman provisions.

See also

• Default
• Event of default
• Finance party default
• Lehman provisions
• Loan agreement

Other resource

• The ACT Borrower’s Guide to the LMA’s Investment Grade Agreements - 2022 - p378