imported>Doug Williamson |
imported>Doug Williamson |
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| ''Borrowing and lending - documentation.''
| | The risk, on a payment date when each party has an obligation to make a payment, that one party will make its required payment but the other party will fail to do so. |
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| The concept of a defaulting lender is an element of borrowing and lending documentation, designed for the protection of the borrower. | |
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| 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.
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| When a lender becomes a defaulting lender under the borrowing documentation, the borrower enjoys additional rights to protect its position as borrower.
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| Defaulting lender provisions are a part of ''Lehman provisions''.
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| :<span style="color:#4B0082">'''''Borrowers' rights to prepay'''''</span>
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| :"Borrowers will note that there is no general right to prepay a defaulting lender...
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| :However, some borrowers may want the flexibility to prepay rather than have the defaulting lender remain in the syndicate with voting rights which it may or may not exercise.
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| :This is a point for borrowers to discuss with their arrangers."
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| :''The ACT Borrower’s Guide to the LMA’s Investment Grade Agreements - 6th edition - 2022 - p379.''
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| == See also == | | == See also == |
| * [[Arranger]] | | * [[Herstatt risk]] |
| * [[Default]] | | * [[Risk]] |
| * [[Documentation]]
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| * [[Event of default]]
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| * [[Finance party default]]
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| * [[Investment Grade Agreements]]
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| * [[Lehman provisions]]
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| * [[Loan agreement]]
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| * [[Loan Market Association]] (LMA)
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| * [[Prepayment]]
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| * [[Syndicate]]
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| ==Other resource==
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| * [https://www.treasurers.org/hub/best-practice/borrowers-guide-LMA-investment-grade-agreements The ACT Borrower’s Guide to the LMA’s Investment Grade Agreements - 2022 - p378-379]
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| [[Category:Accounting,_tax_and_regulation]] | | [[Category:Financial_risk_management]] |
| [[Category:The_business_context]]
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| [[Category:Corporate_finance]]
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| [[Category:Long_term_funding]]
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| [[Category:Identify_and_assess_risks]]
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| [[Category:Manage_risks]]
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| [[Category:Risk_frameworks]]
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| [[Category:Risk_reporting]]
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| [[Category:Financial_products_and_markets]]
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